[zvix]

@shoj said:
Can someone please explain their reasons for dividing $42 per hour standard labour by 3 hours for the labour question (Q5)? The formula for labour rate planning variance is (standard wage rate – revised wage rate) x actual labour hours used; so why divide $42 by 3 hours? 3 hours were used in total to make one pair of shoe.

My answer for labour rate planning variance was ($42 – $42.84) x 37000 total hours used = $31080A

@Shoj. I did exactly the same thing you did throughout my variance workings and everything was Perfect! but somehow dividing by 3 actually seems right however our answers just might score half marks for knowing the technique at least. it sucks realizing it now but lets keep our fingers crossed.

[zvix]

@fbawany said:
I said $100 too

i said $100 too! because i figured they dont earn interest so their value will be the same! hopefully its correct.

[zvix]

@vipulv said:
How did people do there TAD for NPV?

I did 4000/4 = 1000

Multiply by tax and year 2-5 got 280.

Did people deduct the 500 scrap to do 4000-500 then 28%?

my TADs were exactly as yours 280. but i did the timing from 1-3 years coz the investment was made in year 1 so had to be accounted for in that year and the TAD for the 4th year i did it like 28%of 500. it was 140 for the 4th year. i dont know if i did it correctly. but for the 280 we definitely on the same page.

[zvix]

@mc20united20 said:
how come? :O
Every year 3000 cashflows and investment is 9000 no scrap value. the target of roce is 15% and Payback period 2.5 years.

all i did for payback period was deducting the investment from yearly cashflow, that means it took 3 yrs.

for ROCE i did was, for avergae investment: (9000-0)/2 and average profit ((3000×5)-9000)/5
ROCE = 1200/4500 = 26.7%.

I don’t know what did i miss in that question? :S

Roce was based on initial investment not average investment. so there was no need to divided the 9000/2.. therefore roce would come up as 13.33. below target. so reject.

[zvix]

I got WACC 6.91%. and im seeing most people got around 9%. now im getting a lil worried

[zvix]

I really hope the markers will be generous.

[zvix]

@anyani said:
I would say question 3 , 4, 5 where pretty easy.
question 3 was life cycle costing
4 balance score card explanation and application to the question (1 goal, 1 measure, and reason)
5 straight forward operational and planning variance with tricky numbers. (Labour per pair of shoes 42$. one pair took 3 hours ). Then access manager’s performance.

Overall question 1 took more of my time. I had no clue what was going on there for a while. Question 2 what the inflation and depreciation needed a bit of focus.

that’s exactly what i did on variance question

[zvix]

original standards were labour rate was $42/ hour and each pair took 3hours to make 12000pairs therefore in total 36000 hours were budgeted for and actual pairs being 12600 pairs for 37000 hours. the efficiency variance, the standard hours would be found by finding out how many hours 12600 pairs would have taken. i.e ((12600x3hrs/pair) and comparing it with actual 37000hrs)) x std rate $42/hour. at least that’s what i thought was needed. anyone who had the same answer??

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