### Chapter 23**Mesa Bottle Company (MBC) Cost Standards and Analysis**Mesa Bottle Company (MBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are outlined in the table below:#### Standard Cost per 100 Two-Liter Bottles| Cost Category | Cost ||-------------------|--------|| Direct labor | $1.86 || Direct materials | $6.48 || Factory overhead | $0.56 || **Total** | **$8.90**|At the beginning of July, MBC management planned to produce 600,000 bottles. The actual number of bottles produced for July was 645,000 bottles. The actual costs for July of the current year are detailed in the table below:#### Actual Cost for the Month Ended July 31, 2019| Cost Category | Cost ||-------------------|---------|| Direct labor | $12,143 || Direct materials | $40,915 || Factory overhead | $3,780 || **Total** | **$56,838**|### Exercisesa. **Prepare the July manufacturing standard cost budget** (direct labor, direct materials, and factory overhead) for MBC, 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 July.c. **Interpret the budget performance report.**

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Description: ### Chapter 23**Mesa Bottle Company (MBC) Cost Standards and Analysis**Mesa Bottle Company (MBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are outlined in the table below:#### Stan

Budgets are the estimates or forecasts made for future period of time. Standard cost budget is based…

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Chapter 23 Mesa Bottle Company (MBC) 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 $1.86 Direct materials 6.48 Factory overhead 0.56 Total $8.90 At the beginning of July, MBC management planned to produce 600,000 bottles. The actual number of bottles produced for July was 645,000 bottles. The actual costs for July of the current year were as follows: Actual Cost for the Month Ended July 31, 2019 Cost Category Direct labor $12,143 40,915 Direct materials Factory overhead Total 3,780 $56,838 a. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for MBC, 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 July. c. Interpret the budget performance report.

Chapter 23 Mesa Bottle Company (MBC) 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 $1.86 Direct materials 6.48 Factory overhead 0.56 Total $8.90 At the beginning of July, MBC management planned to produce 600,000 bottles. The actual number of bottles produced for July was 645,000 bottles. The actual costs for July of the current year were as follows: Actual Cost for the Month Ended July 31, 2019 Cost Category Direct labor $12,143 40,915 Direct materials Factory overhead Total 3,780 $56,838 a. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for MBC, 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 July. c. Interpret the budget performance report.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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