Question
Mesa Bottle Company (MBC) manufactures plastic twoliter bottles for the beverage industry. The cost standards per 100 twoliter bottles are as follows: Standard cost per
Mesa Bottle Company (MBC) manufactures plastic twoliter bottles for the beverage industry. The cost standards per 100 twoliter bottles are as follows: Standard cost per 100 two liter
Cost Category Bottles Direct labor $1.42 Direct materials 5.96 Factory overhead 0.40 ------------------- Total $7.78
At the beginning of July, MBC management planned to produce 560,000 bottles. The actual number of bottles produced for July was 620,000 bottles. The actual costs for July of the current year were as follows: Actual cost for the month ended
Cost Category July 31, 2015 Direct labor $9,680 Direct materials 35,960 Factory overhead 2,475 ------------------- Total $48,115
a. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, 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. c. Interpret the budget performance report.
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