Standard Cost most Category per 100 Two-Liter Bottles rect labor $1.20 rect materials 6.50 1.80 actory overhead Total $9.50 the beginning of March, Salisbury's management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: Actual Cost for the most Category Month Ended March 31 rect labor $6,550 irect materials 33,800 actory overhead 9,100 Total $49,450 Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. Salisbury Bottle Company Manufacturing Cost Budget For the Month Ended March 31 Standard Cost at Planned Volume (500,000 Bottles) Check My Work Multiply the standard cost per unit times the units of planned production. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Salisbury Bottle Company Manufacturing Costs-Budget Performance Report For the Month Ended March 31 Actual Costs Standard Cost at Actual Volume (525,000 Bottles) Cost Variance- (Favorable) Unfavorable Manufacturing costs: Direct labor Direct materials Factory overhead Manufacturing costs: Direct labor Direct materials Factory overhead Total Feedback Total manufacturing cost
Standard Cost most Category per 100 Two-Liter Bottles rect labor $1.20 rect materials 6.50 1.80 actory overhead Total $9.50 the beginning of March, Salisbury's management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: Actual Cost for the most Category Month Ended March 31 rect labor $6,550 irect materials 33,800 actory overhead 9,100 Total $49,450 Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. Salisbury Bottle Company Manufacturing Cost Budget For the Month Ended March 31 Standard Cost at Planned Volume (500,000 Bottles) Check My Work Multiply the standard cost per unit times the units of planned production. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Salisbury Bottle Company Manufacturing Costs-Budget Performance Report For the Month Ended March 31 Actual Costs Standard Cost at Actual Volume (525,000 Bottles) Cost Variance- (Favorable) Unfavorable Manufacturing costs: Direct labor Direct materials Factory overhead Manufacturing costs: Direct labor Direct materials Factory overhead Total Feedback Total manufacturing cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:
Standard Cost
Cost Category
per 100 Two-Liter
Bottles
Direct labor
$1.20
Direct materials
6.50
Factory overhead
1.80
Total
$9.50
At the beginning of March, Salisbury's management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows:
Actual Cost for the
Cost Category
Month Ended March 31
Direct labor
$6,550
Direct materials
33,800
Factory overhead
9,100
Total
$49,450
a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production.
Salisbury Bottle Company
Manufacturing Cost Budget
For the Month Ended March 31
Standard Cost at Planned
Volume (500,000 Bottles)
Check My Work
Multiply the standard cost per unit times the units 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. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Salisbury Bottle Company
Manufacturing Costs-Budget Performance Report
For the Month Ended March 31
Actual
Costs
Standard Cost
at Actual Volume
(525,000 Bottles)
Cost Variance-
(Favorable)
Unfavorable
Manufacturing costs:
Direct labor
Direct materials
Factory overhead
Manufacturing costs:
Direct labor
Direct materials
Factory overhead
Total
Feedback
Total manufacturing cost.
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