Ex 23.03 Excel Budgeting
Question Description
23.03.PET Bottle Company.doc23-03_24e.xlsx
PET Bottle Company (PBC) 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 $1.32
Direct materials 5.34
Factory overhead 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 was as follows:
Cost Category Actual Cost for the
Month Ended March 31, 2012
Direct labor $ 5,900
Direct materials 25,300
Factory overhead 1,900
Total $33,100
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.
d.) Budget performance report
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