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Budget performance report Genie in a Botile Company (GBC) 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 $ 2.00 Direct materials 9.10 Factory overhead 0.55 Total $11.65 At the beginning of July, GBC management planned to produce 400,000 hollies. The actual number of bottles produced for July was 406,000 bottles. The actual costs for July of the current year were as follows: Cost Category Actual Cost for the Month Ended July 31 Direct labor $ 7,540 Direct materials 35,750 Factory overhead 2,680 Total $45,970 a. Prepare the July manufacturing .standard cost budget (direct labor, direct materials, and factory overhead) for GBC, 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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Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

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Chapter
Section
Chapter 23, Problem 23.3EX
Textbook Problem

Budget performance report

 Genie in a Botile Company (GBC) 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 $ 2.00
Direct materials 9.10
Factory overhead 0.55
Total $11.65

 At the beginning of July, GBC management planned to produce 400,000 hollies. The actual number of bottles produced for July was 406,000 bottles. The actual costs for July of the current year were as follows:

Cost Category Actual Cost for the Month Ended July 31
Direct labor $ 7,540
Direct materials 35,750
Factory overhead 2,680
Total $45,970

 a.    Prepare the July manufacturing .standard cost budget (direct labor, direct materials, and factory overhead) for GBC, 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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Chapter 23 Solutions

Accounting
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