Question

Budget Performance Report

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

Cost Category		Standard Cost per 100 Two-Liter Bottles
Direct labor			$1.56
Direct materials			5.08
Factory overhead			0.38
	Total		$7.02

At the beginning of July, GBC management planned to produce 510,000 bottles. The actual number of bottles produced for July was 550,800 bottles. The actual costs for July of the current year were as follows:

Cost Category		Actual Cost for the Month Ended July 31
Direct labor						$8,421
Direct materials						27,309
Factory overhead						2,114
	Total					$37,844

Enter all amounts as positive numbers.

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

Genie in a Bottle Company
Manufacturing Cost Budget
For the Month Ended July 31
	Standard Cost at Planned Volume(510,000 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 July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If required, round your answers to nearest cent.

Genie in a Bottle Company
Manufacturing Costs-Budget Performance Report
For the Month Ended July 31
	Actual Costs	Standard Cost at Actual Volume(550,800 Bottles)	Cost Variance- (Favorable) Unfavorable
Manufacturing costs:
Direct labor	$	$	$
Direct materials
Factory overhead
Total manufacturing cost	$	$	$

c. The Company's actual costs were $822.16   than budgeted.   direct labor and direct material cost variances more than offset a small   factory overhead cost variance.

Answer 1

Genie in a Bottle Company
Manufacturing Cost Budget
For the Month Ended July 31
	Standard Cost at Planned Volume (510,000 Bottles)
Manufacturing costs:
Direct labor ($1.56X 510000/100)	$7,956.00
Direct materials ($5.08X510000/100)	$25,908.00
Factory overhead ($0.38X 510000/100)	$1,938.00
Total	$35,802.00

Genie in a Bottle Company
Manufacturing Costs-Budget Performance Report
For the Month Ended July 31
	Actual	Standard Cost at Actual Volume(550,800 Bottles)	Cost Variance-
	Costs		(Favorable)
			Unfavorable
Manufacturing costs:
Direct labor ($1.56X 550800/100)	$8,421.00	$8,592.00	$171 Favourable
Direct materials ($5.08X550800/100)	$27,309.00	$27,981.00	$672 Favourable
Factory overhead ($0.38X 550800/100)	$2,114.00	$2,093.00	$21 Unfavourable
Total	$37,844.00	$38,666.00	$822 faourable