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A building had an idle time variance of $6,600. It had spent $92,000 on 1,500 hours of labour to produce 375 units of output. The standard rate for labour was $60 per hour. The labour efficiency variance was $9,240 adverse.
What was the standard hours per unit for the product?
A 0.21 hours
B 0.24 hours
C 4.12 hours
D 4.85 hoursI have try this question for a thousand times and still did’nt get this answer, can you help me to solve this problem?
Assuming that you have copied out the question correctly, then none of the choices are correct!
The actual hours worked were 1,500. The idle time variance is 6,600/60 = 110 hours and the efficiency variance is 9,240/60 = 154 hours.
Therefore the standard time for the actual production is 1,500 – 110 – 154 = 1,236 hours.Since the actual production was 375 units, the standard time per unit = 1,236/375 = 3.30 hours per unit.
If this was a past exam question or a question in the BPP Revision Kit, then tell me which one and I can check the wording of the question myself 🙂
(It would actually be very unusual for this question to be asked in Paper PM anyway, because basic variances are examined in Paper MA (was F2). Variance questions in Paper PM are almost always either on planning and operation variances or on mix and yield variances.)
It is a question from my Progress Test exam, by the way, thank you a lot! It such a very good explanation ?
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