Kanga Ltd manufactures one product, and the entire product is sold as soon as it is produced. There is no opening or closing stocks and work in progress is negligible. The company operates a standard costing system and analysis of variances is made every month. The standard cost card for the product is as follows Standard cost card Shs Direct materials 0.5 kilos at Shs 4 per kilo 2.00 Direct wages 2 hours at Shs 2.00 per hour 4.00 Variable overheads 2 hours at Shs 0.30 per hour 0.60 Fixed overhead 2 hours at Shs 3.70 per hour 7.40 Standard cost 14.00 Standard profit 6.00 Standard selling price 20.00 Budgeted output for June was 5,100 units. Actual results for June were as follows.
• Production of 4,850 units was sold for Shs 95,600
• Materials consumed in production amounted to 2,300 kilos at total cost of Shs 9,800
• Labour hours paid for amounted to 8,500 hours at a cost of Shs 16,800
• Actual operating hours amounted to 8,000 hours
• Variable overheads amounted to Shs 2,600
• Fixed overheads amounted to Shs 42,300 REQUIRED
Calculate all variances and prepare an operating statement for June.