Question
Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards Performance goals, often relating to how much a
Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards
Performance goals, often relating to how much a product should cost.
per 100 two-liter bottles are as follows:
Cost Category | Standard Cost per 100 Two-Liter Bottles |
Direct labor | $2.00 |
Direct materials | 10.00 |
Factory overhead | 0.70 |
Total | $12.70 |
At the beginning of July, GBC management planned to produce 395,000 bottles. The actual number of bottles produced for July was 399,000 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 | $7,420 |
Direct materials | 38,706 |
Factory overhead | 3,258 |
Total | $49,384 |
Required: | |
A. | Prepare the July manufacturing standard cost A detailed estimate of what a product should 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 The difference between actual cost and the flexible budget at actual volumes. 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. |
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