Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Topman MetalBucket Topman ltdis a rubber fabricating company based at North Industrial Area. The company producemetal buckets for the West African market and plans to

Topman MetalBucket

Topman ltdis a rubber fabricating company based at North Industrial Area. The company producemetal 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles Managerial Concepts

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow

7th Canadian Edition

1119310296, 978-1119310297

More Books

Students also viewed these Accounting questions