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	$3.00
Direct materials	9.20
Factory overhead	0.70
Total	$12.90

At the beginning of July, GBC management planned to produce 385,000 bottles. The actual number of bottles produced for July was 389,000 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	$11,100
Direct materials	34,592
Factory overhead	3,192
Total	$48,884

	Required:
A.	Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for GBC, assuming planned production.
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.
C.	Interpret the budget performance report.

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

Genie in a Bottle Company

Manufacturing Cost Budget

For the Month Ended July 31

1	Manufacturing Costs	Standard Cost at Planned Volume (385,000 Bottles)
2	Direct labor
3	Direct materials
4	Factory overhead
5	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.

Genie in a Bottle Company

Budget Performance Report

For the Month Ended July 31

1	Manufacturing Costs	Actual Costs	Standard Cost at Actual Volume (389,000 Bottles)	Cost Variance(Favorable) Unfavorable
2	Direct labor
3	Direct materials
4	Factory overhead
5	Total manufacturing costs

C. Interpret the budget performance report.

The Company's actual costs were $1,297 budgeted. direct labor and direct material cost variances more than offset a small factory overhead cost variance.