Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: Cost Category Direct labor Standard Cost per 100 Two-Liter Bottles $1.20 Direct materials Factory overhead Total 6.50 1.80 $9.50 At the beginning of March, Salisbury's management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: Actual Cost for the Cost Category Direct labor Direct materials Factory overhead Month Ended March 31 Total $6,550 33,800 9,100 $49,450 a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. Salisbury Bottle Company Manufacturing Cost Budget For the Month Ended March 31 Standard Cost at Planned Manufacturing costs: Direct labor Direct materials Factory overhead Total Volume (500,000 Bottles) b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Salisbury Bottle Company Manufacturing Costs-Budget Performance Report For the Month Ended March 31 Standard Cost Actual Costs at Actual Volume (525,000 Bottles) Cost Variance- (Favorable) Unfavorable Manufacturing costs: Direct labor Direct materials Factory overhead Total manufacturing cost c. The Company's actual costs were $425, than budgeted. direct materials and factory overhead cost variances more than offset a small direct labor cost variance.