Question

McAlisters Bottle Company 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 $2.75 Direct materials 1.20 Factory overhead 0.35 Total $4.30 At the beginning of May, McAlisters Bottle's management planned to produce 800,000 bottles. The actual number of bottles produced for May was 750,000 bottles. The actual costs for May of the current year were as follows: Cost Category Actual Cost for the Month Ended May 31 Direct labor $21,100 Direct materials 9,200 Factory overhead 2,700 Total $33,000

  Prepare the May manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for McAlisters Bottle Company, assuming planned production. Enter all amounts as positive numbers.

McAlisters Bottle Company
Manufacturing Cost Budget
For the Month Ended May 31
	Standard Cost at Planned Volume (800,000 Bottles)
Manufacturing costs:
Direct labor	$fill in the blank b724d0fdf029026_1
Direct materials	fill in the blank b724d0fdf029026_2
Factory overhead	fill in the blank b724d0fdf029026_3
Total	$fill in the blank b724d0fdf029026_4

Answer 1

a.
	MCALISTERS BOTTLE COMPANY
	Manufacturing Cost Budget
	For the Month Ended May 31, 2012
	Standard Cost at Planned Volume (800,000 Bottles)
	Manufacturing costs:
	Direct labor	$22,000
	Direct materials	9,600
	Factory overhead	2,800
	Total	$34,400
	$2.75 × (800,000 ÷ 100) = $22,000
	$1.20 × (800,000 ÷ 100) = $9,600
	$0.35 × (800,000 ÷ 100) = $2,800
	Note: The cost standards are expressed as “per 100 bottles.”

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