03.PET Bottle Company.doc23-03_24e.xlsx
PET Bottle Company (PBC) 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 $1.32
Direct materials 5.34
Factory
overhead 0.34
Total $7.00
At
the beginning of March, PBC management planned to produce 450,000 bottles. The
actual
number of bottles produced for March was 500,000 bottles. The actual costs for
March
of the current year was as follows:
Cost Category Actual Cost
for the
Month Ended March 31, 2012
Direct
labor $ 5,900
Direct
materials 25,300
Factory overhead 1,900
Total
$33,100
a.)
Prepare the March manufacturing standard cost budget (direct labor, direct
materials,
and
factory overhead) for PBC, 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 March.
c.)
Interpret the budget performance report.
d.)
Budget performance report