Pet Bottle Company (PBC) manufactures plastic two-liter bottles for the beverage industry. The cost standard per 100
Question:
Pet Bottle Company (PBC) manufactures plastic two-liter bottles for the beverage industry. The cost standard 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 over heads ....... 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 were as follows:
(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.
Step by Step Answer:
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren