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in a period 12250 units were made and there was a favourable labour efficiency variance of $11250. IF 41000 labour hours were worked and the standard wage rate was $6 per hour , how many standard hours ( to two decimal places ) were allowed per unit ?
sir, i dont know completely how to do this question . i tried but not getting correct answer thats y iam asking you .
sir one more doubt i have is that what is the difference between standard , actual and budgeted labour hours . please provide me with an example.
Thank you sir for your replies to my all questions.Their is an efficiency variance of 11250 which means they worked 11250/6 = 1875 hours less than they were expected to for the actual production.
So the standard hours for the actual production is 41000 + 1875 = 42875 hours.
Since 12250 units were produced, the standard hours per unit is 42875/12250 = 3.5 hours.
Standard hours are the budgeted hours per unit; budgeted hours are the total expected hours; actual hours are the hours actually worked.
You need to watch the lectures for examples of all of this.
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