Dear John, While calculating the V.O.H expenditure variance, why we did not take standard cost as (Produced units 8,900 * 5 hrs. as mentioned next to v.o.h cost card * $2 per hour as mentioned next to v.o.h cost card).
I hope you are good, I watched your nice lecture but still have a question in regards to quantity variance for material and efficiency variance for labour for example let’s take efficiency variance as an example, you calculated the efficiency variance in units it was 400Hours this is ok but why did you multiply400Hours by the standard cost per Hour why didn’t use the actual cost per Hour?
hi sir I do not understand how fixed overhead volume variance is 3000 favourable. i listened your lecture but could not get it. could you please set it out in writting. thanks sir
That is correct and is what I do in the lecture! However that is just the total variable overhead variance and in the exam you can be asked to analyse it (as I do in my lectures).
Quick question we manufactured 8900 units at 5hrs per unit at cost of $5 per labour hour which means the standard labour cost should be 8900*5=44500hrs*$5=$222500 how come you are getting total labour hours of 45400?
The question says that the actual labour hours paid were 45,400, and it is the actual hours paid that we use when calculating the rate of. pay variance.
dear sir why are we taking actual hours worked rather than paid in variable expenditure variance? is the reason because expense is incurred while labour worked.
abdelrahman1410 says
kindly I want a copy of chapter 14 board for examples solution please
John Moffat says
The solutions are printed in the lecture notes that you can download free of charge – heck the index page to find them!
shakir7385 says
Dear John,
While calculating the V.O.H expenditure variance, why we did not take standard cost as (Produced units 8,900 * 5 hrs. as mentioned next to v.o.h cost card * $2 per hour as mentioned next to v.o.h cost card).
John Moffat says
Because we are checking whether they actually paid $2 per hour or not.
7fsa says
Dear John,
I hope you are good,
I watched your nice lecture but still have a question in regards to quantity variance for material and efficiency variance for labour for example let’s take efficiency variance as an example, you calculated the efficiency variance in units it was 400Hours this is ok but why did you multiply400Hours by the standard cost per Hour why didn’t use the actual cost per Hour?
Thank You.
John Moffat says
Because we want to know first the effect of just the hours changing. Then for the rate variance we look at the effect of the rate changing.
7fsa says
Dear John,
Thank you so much I get you.
John Moffat says
You are welcome 馃檪
saharaking says
hi sir
I do not understand how fixed overhead volume variance is 3000 favourable. i listened your lecture but could not get it. could you please set it out in writting.
thanks sir
tiwari.ekta1@gmail.com says
sir,i calculated the variable overhead variance like this.please tell me whether it is the right way or not?Thanks in advance
actual variable overheads 87,348
less: actual at standard rate 89,000
(8900*5*2) =1652F
John Moffat says
That is correct and is what I do in the lecture! However that is just the total variable overhead variance and in the exam you can be asked to analyse it (as I do in my lectures).
mcdonaldmusimwa says
Quick question we manufactured 8900 units at 5hrs per unit at cost of $5 per labour hour which means the standard labour cost should be 8900*5=44500hrs*$5=$222500 how come you are getting total labour hours of 45400?
John Moffat says
The question says that the actual labour hours paid were 45,400, and it is the actual hours paid that we use when calculating the rate of. pay variance.
alie2018 says
Thanks John
shanif007 says
dear sir why are we taking actual hours worked rather than paid in variable expenditure variance? is the reason because expense is incurred while labour worked.
kashm93 says
Can I find the list of formulas anywhere for the variances?
John Moffat says
No. All the rules are explained in the lectures – better then to write the formulae down yourself 馃檪