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Question 14a.6 from BPP
The actual hour worked is 9400
Original budget hour work is 9000It mean the labour hour is longer than we expected . Then it should be (400×4$) 1600 (A) ?
As the answer shown 1600( F ) .
Can you pls explain?Thanks Mr John
The question is asking for the fixed overhead capacity variance. They managed to work more hours than budgeted and therefore the variance is favourable. I do explain this and the reason for it in my free lectures on fixed overhead variances.
Thanks for your reply . Can you pls help me question 14a13
1- Based on your lecture :
Actual purchase @ actual cost 110.000
Actual purchase @ standard cost = 50$ x actual kg purchase( which I can’t find that actual kg)
But The answer shows 50$ x 2000 unit . I’m confused with this 2000 unit . As this is unit produced , not Kg of material ?
2- On the top , the question show ” ” number of units produced budget -2200 and actual 2000 ”
Buf the bottom also show ” the actual number of units produced was 2000″
Should I understand it’s the same actual unit produced ? As its repeated , so I’m confused .
Thanks Mr.John
1. Your workings are the workings for the material expenditure variance. However the question does not ask for the expenditure variance – it asks for the total materials variance.
The total variance compares the actual cost of the actual units produced with the standard cost of the actual units produced.
2. Yes – the actual units produced were 2,000 !
Thanks for your reply
Question 14b3 from BPP
I’m struggling with this question . I don’t know where to start to calculate actual production .
Can you pls show me the way ? Thanks Mr John
My workings for for 14b 3 :
The difference between actual purchase @ actual cost ( $2400) and actual purchase @ standard cost is 800(A) .
So actual purchase @ standard cost is 1600$ . It mean actual purchase is 800kg .
But when I devide this 800kg with standard kg per unit ( 5kg ) . The results is only 160 unitsWhat should I do to have 200 unit ?
Thanks Mr John
This is really the same logic as your previous question.
The total materials variance is 800 – 400 = 400 adverse.
The total materials variance is the difference between the actual total cost and the standard cost of the actual production.
You know that the actual total cost is $2,400.
You know that the standard cost of actual production is therefore 2400 – 400 = $2,000.
You know that the standard cost per unit is $10.
Therefore the actual production is 2,000/10 = 200 units.
Ahhhhhhh I’ve got it .
I think it will be easier for me to calculate separately as what you taught in the previous chapter .
So I’ll have that 800 of actual kg when I calculate expenditure variance .
And I’ll use that 800kg to calculate usages variance , then I’ll have units produced :)))
Your calculation is the easiest to remember .
Thanks Mr John ( pls don’t close the topic . I have few questions to ask in the chapter
You are welcome.
If you have more questions, but on different questions from the Revision Kit, then you must ask them in a new thread.
The reason is that we do not offer free private tuition, and so our answers are for the benefit of all students – many use the search box to see if their problem has already been dealt with.
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