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Each widget should take 0.5 hrs to make.The standard rate of pay is $10 per hr.Idle time is expected to be 5%of hrs paid.
They actually produce 10800 units.They pay $50000 for 6000hrs of which 330 hrs are idle.What is the labour efficiency variance?
Hi sir, this is not like a previous question..in this question they want to calculate labour efficiency variance but previous qustn excess idle time.Could u please advice me for this qstn…….thank you
In future you MUST ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.
Again – this is covered in detail in the lecture on Advanced Idle Time variances. Have you watched the lecture or not?
The standard time for the actual production is 10800 x 0.5 = 5,400 hours. The actual time worked was 5,670 hours. So they have worked 270 hours too many.
The standard cost per working hour is 10/0.95 = 10.53 and so the adverse efficiency variance is 270 x 10.53 = $2843 adverse.
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