Sir,

May I ask you.
1) If we revised budget rate of pay, then the standard rate has to use revised amount.
In the efficiency variance, operational and planning variance are using original budget standard rate.
May I know why?
2) Can I say if in the exam, ask for the comment.
It can be accept as per learning curve equation, if a labor got efficiency (hr/unit decrease), rate/unit must be increased. However, when compare with actual and revised budget, actual hour/unit is more than revised budget and actual rate/unit is less than revised budget.
It can be two reason that skill labor turnover is unstable and it may be labor could not get estimated efficiency to work done.

Comments

mayzin1707 says
November 28, 2016 at 11:05 pm
Sir,
May I ask you.
1) If we revised budget rate of pay, then the standard rate has to use revised amount.
In the efficiency variance, operational and planning variance are using original budget standard rate.
May I know why?
2) Can I say if in the exam, ask for the comment.
It can be accept as per learning curve equation, if a labor got efficiency (hr/unit decrease), rate/unit must be increased. However, when compare with actual and revised budget, actual hour/unit is more than revised budget and actual rate/unit is less than revised budget.
It can be two reason that skill labor turnover is unstable and it may be labor could not get estimated efficiency to work done.
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