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Question: Time in a Bottle Company (TBC) 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 $ 1.80 Direct materials 8.25 Factory overhead 0.50 Total $10.55 At the beginning of May, TBC management planned to produce 600,000 bottles. The actual number of bottles produced for May was 610,000 bottles. The actual costs for May of the current year were as follows: Cost Category Actual Cost for the Month Ended May 31, 2014 Direct labor $ 9,890 Direct materials 48,450 Factory overhead 3,460 Total $61,800
a. Prepare the May manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for TBC, 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 May.
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