1. Mateso is a product which is manufactured by a small company in kitwe. From every tone of raw materials consumed,it is estimated that 200 articles will be produced. The standard price of the material is K120 per tonne. During the month of February,190 tonnes of material were issued to production, the actual price of which was K118.5 per tonne. Actual production during the month was 38,640 articles.To manufacture the product 100 employees are engaged at a standard rate of K3.6 per hour.A forty hour week is in operation and there are four weeks in February.The standard performance is set at 240 articles per hour. During February,91 employees were paid at the standard rate, but 5 employees were paid at K3.65 per hour and 4 employees were paid at K3.55 per hour. The factory stopped production for two hours because of power failure. Budgeted variable production overhead was K3,840. Budgeted production for the year was 480,000 articles. Actual variable production overheads were K3,830. The annual budgeted fixed production were K384,000. There are 50 working weeks in the year. During February the actual amount of fixed overheads incurred was K31,370.

Units produced were sold for K150,000 just as budgeted

(a)Prepare a standard cost card (5 Marks)

(b)Prepare Budgeted income statement (5 Marks)

(c) Prepare Income statement based on actual results (5 Marks)

(d) Calculate the necessary variances and prepare a variance report that reconcile actual profits with budgeted profit. (5 marks)