Interplast Ghana is a rubber fabricating company based at North Industrial Area. The company produce rubber buckets for the West African market and plans to produce 1,000 units of buckets in the month of January. The

bucket requires a single operation and the standard cost for the operation

is presented below:

Standard cost card (bucket)

Direct material (plastics): 10 kg at GH 0.50 per kg) Direct labour (5hours@ GH 20 per hours)

Variable overheads (3 hours at GH 2 per direct labour) Total standard variable cost

Standard contribution margin Standard selling price

Budget statement for the month of January

Sales (1,000 units of buckets at GH 140 per unit) Direct materials: (10,000 at GH 0.50)

Direct labour (4,000 hours @GH 20per hour)

Variable overheads (4,000 hours @GH 2 per direct hour)

Budget contribution

Fixed overheads

Budgeted profit

GH

5

100

6

111

29

140

GH

The annual budgeted fixed overheads is GH 240,000 and are assume to year.

93,000 47,000 20,000 27,000

be incurred evenly throughout the

GH 120,000

Actual results for April are:

Sales (800 units of buckets at GH 150 per unit) Direct materials: (9,000kg at GH 0.60)

GH

5,400

8

GH 140,000

5,000 80,000

8000

Direct labour (3,500 hours @GH 18 per hour)

Variable overheads (3,500 hours @GH 2.50 per direct hour)

Contribution

Fixed overheads

Profit

63,000 8,750

24,850

The production overheads are charged to production on the basis of direct labour hours. Actual production and

sales are 800 units of buckets.

You are require to calculate all the standard variances listed above and reconcile the results thereof.