Curtis Container Company (CCC) manufactures plastic 2-liter bottles for the beverage industry. The cost standards per 100 2-liter bottles are as follows:

At the beginning of May, CCC management planned to produce 400,000 bottles. The actual number of bottles produced for May was 420,000 bottles. The actual costs for May of the current year were as follows:

a. Prepare the May manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for CCC, 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 May.

c. Interpret the budget performance report.

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Cost Category Standard Cost per 100 2-Liter Bottles Direct labor $1.50 Direct materials 6.80 Factory overhead 0.80 Total $9.10