Ex 23.03 Excel Budgeting

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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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