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- This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.
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- May 2, 2019 at 1:22 pm #514781AnonymousInactive
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Sir, Please correct me if my approach to this question is wrong
XYZ Co uses standard costing to control its costs against the targets set. The standard labour cost per batch of one particulars type of product is set as below
Direct labour – 50 hours @ $ 10 per hr
The following labour efficiency variances arose as follows
Month batches sold efficiency variance F\A
July 1 NIL
Aug 1 170 F
Sept 2 452 F
Oct 4 1089.3 F
Nov 8 1711.5 F
Dec 16 3423 FAn investigation has confirmed that all the costs were as expected except that the learning effect in respect of the direct labour that had not been anticipated when the standard cost card was set
Required:
A] Calculate the rates of learning that applied during the six months
B] Identify when the learning period endedSOLUTION:
MONTH BATCHES EFFICIENCY VARIANCE SH SR AH SR AH CUMMULATIVE NO OF BATCHES CUMMULATIVE TOTAL TIME CUMMULATIVE AVERAGE HRS PER BATCH LEARNING RATE
JULY 1 0 500 500 50 1 50 50
AUG 1 170 500 330 33 2 83 41.5 83%
SEPT 2 452 1000 548 54.8 4 137.8 34.45 83%
OCT 4 1089.3 2000 910.7 91.07 8 228.87 28.60875 83%
NOV 8 1711.5 4000 2288.5 228.85 16 457.72 28.6075
DEC 16 3423 8000 4577 457.7 32 915.42 28.606875THE LEARNING RATE IS 83%
STEADY STATE REACHES IN THE MONTH OF NOVEMBERMay 2, 2019 at 3:10 pm #514789It seems to be correct.
But why are you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers. They are full of exam standard questions together with answers 🙂
May 2, 2019 at 4:11 pm #514795AnonymousInactive- Topics: 22
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Ok, Sir! Thank you for your guidance.
May 3, 2019 at 1:38 pm #514843You are welcome 🙂
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