Topman Metal Bucket

Topman ltd is a rubber fabricating company based at North Industrial Area. The company produce metal 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) GH

Direct material (plastics): 10 kg at GH 0.50 per kg) 5

Direct labour (5hours@ GH 20 per hours) 100

Variable overheads (3 hours at GH 2 per direct labour) 6

Total standard variable cost 111

Standard contribution margin 29

Standard selling price 140

Budget statement for the month of January GH GH

Sales (1,000 units of buckets at GH 140 per unit) 140,000

Direct materials: (10,000 at GH 0.50) 5,000

Direct labour (4,000 hours @GH 20per hour) 80,000

Variable overheads (4,000 hours @GH 2 per direct hour) 8,000

93,000

Budget contribution 47,000

Fixed overheads 20,000

Budgeted profit 27,000

The annual budgeted fixed overheads is GH 240,000 and are assume to be incurred evenly throughout the year.

Actual results for April are:

GH GH

Sales (800 units of buckets at GH 150 per unit) 120,000

Direct materials: (9,000kg at GH 0.60) 5,400

Direct labour (3,500 hours @GH 18 per hour) 63,000

Variable overheads (3,500 hours @GH 2.50 per direct hour) 8,750

77,150

Contribution 42,850

Fixed overheads 18,000

Profit 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