Lanier Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100...

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Lanier Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: Standard Cost per 100 Two-Liter Bottles Cost Category Direct labor $1.25 Direct 4.80 materials Factory 1.50 overhead Total $7.55 At the beginning of January, Lanier Bottle's management planned to produce 3,500,000 bottles. The actual number of bottles produced for January was 3,600,000 bottles. The actual costs for January of the current year were as follows: Cost Category Direct labor Direct materials Actual Cost for the Month Ended January 31 $46,750 175,000 Factory overhead Total 52,900 $274,650 a. Prepare the January manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Lanier Bottle, assuming planned production. Lanier Bottle Company Manufacturing Cost Budget For the Month Ended January 31 Standard Cost at Planned Volume (3,500,000 Bottles) Line Item Description Manufacturing costs: Direct labor Direct materials Factory overhead Total $ 43,750 168,000 52,500 264,250 b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for January. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Lanier Bottle Company Manufacturing Costs-Budget Performance Report For the Month Ended January 31 Standard Cost at Actual Volume (3,600,000 Cost Variance- Line Item Description Manufacturing costs: Direct labor Actual Costs (Favorable) Bottles) Unfavorable 46,750 $ 43,750 3,000 Direct materials 175,000 168,000 7,000 Factory overhead 52,900 52,500 400 Total manufacturing cost 274,650 $264,250 10,400 c. Lanier Bottle Company's actual costs were $2,850 more than budgeted. The favorable direct labor and direct materials cost variances more than offset the unfavorable factory overhead cost variance. Lanier Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: Standard Cost per 100 Two-Liter Bottles Cost Category Direct labor $1.25 Direct 4.80 materials Factory 1.50 overhead Total $7.55 At the beginning of January, Lanier Bottle's management planned to produce 3,500,000 bottles. The actual number of bottles produced for January was 3,600,000 bottles. The actual costs for January of the current year were as follows: Cost Category Direct labor Direct materials Actual Cost for the Month Ended January 31 $46,750 175,000 Factory overhead Total 52,900 $274,650 a. Prepare the January manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Lanier Bottle, assuming planned production. Lanier Bottle Company Manufacturing Cost Budget For the Month Ended January 31 Standard Cost at Planned Volume (3,500,000 Bottles) Line Item Description Manufacturing costs: Direct labor Direct materials Factory overhead Total $ 43,750 168,000 52,500 264,250 b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for January. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Lanier Bottle Company Manufacturing Costs-Budget Performance Report For the Month Ended January 31 Standard Cost at Actual Volume (3,600,000 Cost Variance- Line Item Description Manufacturing costs: Direct labor Actual Costs (Favorable) Bottles) Unfavorable 46,750 $ 43,750 3,000 Direct materials 175,000 168,000 7,000 Factory overhead 52,900 52,500 400 Total manufacturing cost 274,650 $264,250 10,400 c. Lanier Bottle Company's actual costs were $2,850 more than budgeted. The favorable direct labor and direct materials cost variances more than offset the unfavorable factory overhead cost variance.

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