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 680,000 bottles. The actual number of bottles produced for March was 730,000 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 (680,000 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 (730,000 Bottles)

Cost Variance-(Favorable) Unfavorable

Manufacturing costs:

Direct labor

$  

$  

$  

Direct materials

  

  

  

Factory overhead

  

  

  

Total manufacturing cost

$  

$  

$  

c. The Company's actual costs were $1,310 SelectmorelessCorrect 1 of Item 3 than budgeted. SelectFavorableUnfavorableCorrect 2 of Item 3 direct labor and direct material cost variances more than offset a small SelectfavorableunfavorableCorrect 3 of Item 3 factory overhead cost variance.

Cost Category Standard Cost
per 100 Two-Liter
Bottles Direct labor $1.56 Direct materials 6.26 Factory overhead 0.28 Total $8.10

Explanation / Answer

Standard Cost for 100 Bottles Standard Cost: Cost Per 100 Amt Direct Labor 1.56 Direct Labor 10,608 Capacity Plan 680000 Direct Material 6.26 Direct Material 42,568 Cost Size 100 Factory OH 0.28 Factory OH 1,904 Total Batch 6800 Total 8.10 Total 55,080 Actual Cost: Standard Cost: Amt Amt Capacity Plan 730000 Direct Labor 11,160 Direct Labor 11,388 Cost Size 100 Direct Material 44,600 Direct Material 45,698 Total Batch 7300 Factory OH 2,060 Factory OH 2,044 Total Manufacturing Cost 57,820 Total 59,130 Warwick Bottle Company Manufacturing Cost Budget For the Month Ended March 31,2014 Manufacturing Costs: Standard=680000 Direct Labor 10608 (6800*1.56) Direct Material 42568 (6800*6.26) Factory OH 1904 (6800*0.28) Total Manufacturing Cost 55080 Warwick Bottle Company Manufacturing Cost Budget For the Month Ended March 31,2014 Manufacturing Costs: Actual Costs Standard=730000 Cost Variance F/U Direct Labor 11,160 11,388 228 Favourable Direct Material 44,600 45,698 1,098 Favourable Factory OH 2,060 2,044 -16 Unfavourable Total Manufacturing Cost 57820 59,130 1,310 Favourable

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

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