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Glove Co (March 16)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Glove Co (March 16)

  • This topic has 5 replies, 5 voices, and was last updated 1 year ago by LMR1006.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • June 17, 2020 at 7:42 am #574032
    draiells
    Member
    • Topics: 123
    • Replies: 141
    • ☆☆☆

    Hello Sir, I hope you’re doing good and are safe..

    My question, In reference to question 5 of the attached link is that, do we not take account of Over-time rate while calculation labor variances? if we know the overtime rate exists haven’t we made allowances for it in the standard?

    Please help me clear my confusion.

    https://www.accaglobal.com/content/dam/ACCA_Global/Students/fun/f5/j16_hybrid_F5_q.pdf

    June 17, 2020 at 10:19 am #574044
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    We do not know whether or not any overtime was budgeted for (and it probably was not) and neither do we know how much overtime was actually worked.

    All we know is that labour should have cost $42 for 3 hours (later obviously revised).

    The fact that the operational labour rate variance is more than the revised standard rate is probably because they paid overtime, but this is only relevant for the discussion part of the question.

    November 17, 2022 at 11:06 am #671705
    Abhishek.K
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    On the above question, how do they get revised standard 3.25 for the Labour Efficiency Planning variance

    November 17, 2022 at 3:08 pm #671732
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    The original standard time was 3 hours. The question says that the extra time for the logo is 15 minutes. 15 minutes is 1/4 of an hour or 0.25 hours.

    February 29, 2024 at 8:43 pm #701495
    ilievas
    Participant
    • Topics: 14
    • Replies: 6
    • ☆

    Hello,

    I am really confused as to why for the labour planning and operational variances in the solutions they take the following formula:

    labour rate planning variance:
    (revised rate – std rate) x actual hours paid

    Why is that? I thought that for planning – we replace the Actual figure with the revised figure, so basically it is not actual hours but instead revised hours???

    Could you please help me out

    Thank you!

    February 29, 2024 at 9:07 pm #701498
    LMR1006
    Keymaster
    • Topics: 4
    • Replies: 1496
    • ☆☆☆☆☆

    Only one thing can change in a variance at a time.
    So if you are calculating

    Say labour rate planning variance:
    You should be looking at the difference between standard and revised rate

    Say labour rate operational variance:
    You should be looking at the difference between revised rate and actual paid.

    The hours would be the same for both

  • Author
    Posts
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