Budget Performance Report Warwick Bottle Company (WBC) 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 $1.56 Direct materials 4.88 Factory overhead 0.32 Total $6.76 At the beginning of March, WBC management planned to produce 540,000 bottles. The actual number of bottles produced for March was 580,000 bottles. The actual costs for March of the current year were as follows: Cost Category Actual Cost for the Month Ended March 31, 2014 Direct labor $8,870 Direct materials 27,620 Factory overhead 1,870 Total $38,360 Enter all amounts as positive numbers. a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, 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. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

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Chapter1: Financial Statements And Business Decisions
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Budget Performance Report

Warwick Bottle Company (WBC) 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 $1.56
Direct materials 4.88
Factory overhead 0.32
Total $6.76

At the beginning of March, WBC management planned to produce 540,000 bottles. The actual number of bottles produced for March was 580,000 bottles. The actual costs for March of the current year were as follows:

Cost Category Actual Cost for the
Month Ended March 31, 2014
Direct labor $8,870
Direct materials 27,620
Factory overhead 1,870
Total $38,360

Enter all amounts as positive numbers.

a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, 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. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

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