McAlisters Bottle Company 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 $1.20 Direct materials 5.52 Factory overhead 0.26 Total $6.98 At the beginning of May, McAlisters Bottle’s management planned to produce 530,000 bottles. The actual number of bottles produced for May was 570,000 bottles. The actual costs for May of the current year were as follows: Cost Category Actual Cost for the Month Ended May 31 Direct labor $6,980 Direct materials 30,710 Factory overhead 1,500 Total $39,190 a. Prepare the May manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for McAlisters Bottle Company, assuming planned production. Enter all amounts as positive numbers. McAlisters Bottle Company Manufacturing Cost Budget For the Month Ended May 31 Standard Cost at Planned Volume (530,000 Bottles) Manufacturing costs: Direct labor $fill in the blank fe0619febf8afda_1 Direct materials fill in the blank fe0619febf8afda_2 Factory overhead fill in the blank fe0619febf8afda_3 Total $fill in the blank fe0619febf8afda_4 b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for May. Enter favorable variances as negative numbers. Enter unfavorable variances and all other amounts as positive numbers. McAlisters Bottle Company Manufacturing Costs - Budget Performance Report For the Month Ended May 31 Actual Costs Standard Cost at Actual Volume (570,000 bottles) Cost Variance (Favorable) Unfavorable Manufacturing costs: Direct labor $fill in the blank d169b203102efe5_1 $fill in the blank d169b203102efe5_2 $fill in the blank d169b203102efe5_3 Direct materials fill in the blank d169b203102efe5_4 fill in the blank d169b203102efe5_5 fill in the blank d169b203102efe5_6 Factory overhead fill in the blank d169b203102efe5_7 fill in the blank d169b203102efe5_8 fill in the blank d169b203102efe5_9 Total manufacturing cost $fill in the blank d169b203102efe5_10 $fill in the blank d169b203102efe5_11 $fill in the blank d169b203102efe5_12 c. Which of the following statements is true regarding McAlisters's budget performance report?
McAlisters Bottle Company 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 $1.20 Direct materials 5.52 Factory overhead 0.26 Total $6.98 At the beginning of May, McAlisters Bottle’s management planned to produce 530,000 bottles. The actual number of bottles produced for May was 570,000 bottles. The actual costs for May of the current year were as follows: Cost Category Actual Cost for the Month Ended May 31 Direct labor $6,980 Direct materials 30,710 Factory overhead 1,500 Total $39,190 a. Prepare the May manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for McAlisters Bottle Company, assuming planned production. Enter all amounts as positive numbers. McAlisters Bottle Company Manufacturing Cost Budget For the Month Ended May 31 Standard Cost at Planned Volume (530,000 Bottles) Manufacturing costs: Direct labor $fill in the blank fe0619febf8afda_1 Direct materials fill in the blank fe0619febf8afda_2 Factory overhead fill in the blank fe0619febf8afda_3 Total $fill in the blank fe0619febf8afda_4 b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for May. Enter favorable variances as negative numbers. Enter unfavorable variances and all other amounts as positive numbers. McAlisters Bottle Company Manufacturing Costs - Budget Performance Report For the Month Ended May 31 Actual Costs Standard Cost at Actual Volume (570,000 bottles) Cost Variance (Favorable) Unfavorable Manufacturing costs: Direct labor $fill in the blank d169b203102efe5_1 $fill in the blank d169b203102efe5_2 $fill in the blank d169b203102efe5_3 Direct materials fill in the blank d169b203102efe5_4 fill in the blank d169b203102efe5_5 fill in the blank d169b203102efe5_6 Factory overhead fill in the blank d169b203102efe5_7 fill in the blank d169b203102efe5_8 fill in the blank d169b203102efe5_9 Total manufacturing cost $fill in the blank d169b203102efe5_10 $fill in the blank d169b203102efe5_11 $fill in the blank d169b203102efe5_12 c. Which of the following statements is true regarding McAlisters's budget performance report?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
McAlisters Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:
| Cost Category | per 100 Two-Liter Bottles |
|||||
| Direct labor | $1.20 | |||||
| Direct materials | 5.52 | |||||
| Factory |
0.26 | |||||
| Total | $6.98 |
At the beginning of May, McAlisters Bottle’s management planned to produce 530,000 bottles. The actual number of bottles produced for May was 570,000 bottles. The actual costs for May of the current year were as follows:
| Cost Category | Actual Cost for the Month Ended May 31 |
|||||||||
| Direct labor | $6,980 | |||||||||
| Direct materials | 30,710 | |||||||||
| Factory overhead | 1,500 | |||||||||
| Total | $39,190 |
a. Prepare the May manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for McAlisters Bottle Company, assuming planned production. Enter all amounts as positive numbers.
| McAlisters Bottle Company | |
| Manufacturing Cost Budget | |
| For the Month Ended May 31 | |
| Standard Cost at Planned Volume (530,000 Bottles) |
|
| Manufacturing costs: | |
| Direct labor | $fill in the blank fe0619febf8afda_1 |
| Direct materials | fill in the blank fe0619febf8afda_2 |
| Factory overhead | fill in the blank fe0619febf8afda_3 |
| Total | $fill in the blank fe0619febf8afda_4 |
b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for May. Enter favorable variances as negative numbers. Enter unfavorable variances and all other amounts as positive numbers.
| McAlisters Bottle Company | |||
| Manufacturing Costs - Budget Performance Report | |||
| For the Month Ended May 31 | |||
Actual Costs |
Standard Cost at Actual Volume (570,000 bottles) |
Cost Variance (Favorable) Unfavorable |
|
| Manufacturing costs: | |||
| Direct labor | $fill in the blank d169b203102efe5_1 | $fill in the blank d169b203102efe5_2 | $fill in the blank d169b203102efe5_3 |
| Direct materials | fill in the blank d169b203102efe5_4 | fill in the blank d169b203102efe5_5 | fill in the blank d169b203102efe5_6 |
| Factory overhead | fill in the blank d169b203102efe5_7 | fill in the blank d169b203102efe5_8 | fill in the blank d169b203102efe5_9 |
| Total manufacturing cost | $fill in the blank d169b203102efe5_10 | $fill in the blank d169b203102efe5_11 | $fill in the blank d169b203102efe5_12 |
c. Which of the following statements is true regarding McAlisters's budget performance report?
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