Budget Performance Report Warwick Bottle Company ( WBC ) manufactures plastic tw

Question

Budget Performance Report

Warwick Bottle Company (WBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:

At the beginning of March, WBC management planned to produce 580,000 bottles. The actual number of bottles produced for March was 630,000 bottles. The actual costs for March of the current year were as follows:

Enter all amounts as positive numbers.

a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.

Warwick Bottle Company

Manufacturing Cost Budget

For the Month Ended March 31, 2014

Standard Cost at Planned Volume (580,000 Bottles)

Manufacturing costs:

Direct labor

$

Direct materials

Factory overhead

Total

$

b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Warwick Bottle Company

Manufacturing Costs-Budget Performance Report

For the Month Ended March 31, 2014

Actual Costs

Standard Cost at Actual Volume (630,000 Bottles)

Cost Variance-(Favorable) Unfavorable

Manufacturing costs:

Direct labor

$

$

$

Direct materials

Factory overhead

Total manufacturing cost

$

$

$

c. The Company's actual costs were $1,024

than budgeted. direct labor and direct material cost variances more than offset a small factory overhead cost variance.

Cost Category Standard Cost
per 100 Two-Liter
Bottles Direct labor $1.52 Direct materials 5.68 Factory overhead 0.38 Total $7.58

Explanation / Answer

Warwick Bottle Company Manufacturing Cost Budget For the Month Ended March 31, 2014 Particulars Standard Cost at Planned Volume (580,000 Bottles) Manufacturing costs: Direct labor @1.52                                                                8,816.00 Direct Materials@5.68                                                             32,944.00 Factory Overhead @.38                                                                2,204.00 Total                                                             43,964.00 Warwick Bottle Company Manufacturing Costs-Budget Performance Report For the Month Ended March 31, 2014 Particulars Actual Costs Standard Cost at Actual Volume (630,000 Bottles) Cost Variance Favourable or Unfavourable Manufacturing costs: Direct labor                                                                  9,380.00                                                   9,576.00                                        (196.00) Favourable Direct Materials                                                             34,930.00                                                 35,784.00                                        (854.00) Favourable Factory Overhead                                                                  2,420.00                                                   2,394.00                                             26.00 Unfavourable Total                                                             46,730.00                                                 47,754.00                                    (1,024.00) The Company's actual costs were $1,024 lower than budgeted.

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.