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In a period 4920 units were made with a std labour allowance of 6.5 hours per unit at $5 per hour. Actual wages were $6 per hour and there was a favourable efficiency variance of $36000.
Calculate number of labour hours actually worked?
Hi Sir kindly help me with this theory question as well :
if actual sales at actual selling price is more than actual sales at standard selling price, is the variance favourable or adverse?
1 They should have worked 4920 x 6.5 hours = 31980 hours.
There is a favourable eff variance of 36,000. At 6 per hour is means it is favourable by 36,000/6 = 6,000 hours.
So the actual hours worked were 6,000 less than the standard hours.
2 If the actual selling price is more than standard selling price, do you think this would give more profit or less profit?
If it is more profit then the variance is favourable; if it is less profit then the variance is adverse.hi Sir, help me
MCQ
Michel has the following results.
10,080 hours actually worked and paid costing $8,770
If the rate variance is $706 adverse, the efficiency variance $256 favourable, and 5,000 units
were produced, what is the standard production time per unit?1.95 hours
2.08 hours
1.96 hours
2.07 hours
10,080 hours should have cost 8770 – 706 = $8064
So standard cost per hour = 8064 / 10080 = $0.80
Efficiency variance is $256 favourable, so they must have worked 256/0.80 = 320 hours less than standard.
So standard hours = 10,080 + 320 = 10,400 hoursSo standard hours per unit = 10400 / 5,000 = 2.08 hours.
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