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Past Paper Question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Past Paper Question

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • Author
    Posts
  • November 21, 2015 at 10:59 am #284297
    mansoormmaw
    Member
    • Topics: 9
    • Replies: 1
    • ☆

    Respected Sir,
    I got this question from one of the sample paper. And I was not able to solve this one. Can you please solve it for me

    Truffle Co makes high quality, hand-made chocolate truffles which it sells to a local retailer. All chocolates are made in batches of 16, to fit the standard boxes supplied by the retailer. The standard cost of labor for each batch is $6·00 and the standard labour time for each batch is half an hour. In November, Truffle Co had budgeted production of
    24,000 batches; actual production was only 20,500 batches. 12,000 labour hours were used to complete the work
    and there was no idle time. All workers were paid for their actual hours worked. The actual total labour cost for
    November was $136,800. The production manager at Truffle Co has no input into the budgeting process. At the end of October, the managing director decided to hold a meeting and offer staff the choice of either accepting
    a 5% pay cut or facing a certain number of redundancies. All staff subsequently agreed to accept the 5% pay cut with immediate effect. At the same time, the retailer requested that the truffles be made slightly softer. This change was implemented immediately and made the chocolates more difficult to shape. When recipe changes such as these
    are made, it takes time before the workers become used to working with the new ingredient mix, making the process 20% slower for at least the first month of the new operation.

    The standard costing system is only updated once a year in June and no changes are ever made to the system outside
    of this.
    Required:
    (a) Calculate the following variances for Truffle Co:
    (i) Labour rate planning variance
    (ii) Labour rate operational variance
    (iii) Labour efficiency planning variance
    (iv) Labour efficiency operational variance

    November 21, 2015 at 1:53 pm #284315
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51532
    • ☆☆☆☆☆

    We cannot possibly write out full answers to full questions like this.

    Also, I don’t know why you are asking because you can download the answer from the ACCA website!!
    (It was in the December 2012 exam).

  • Author
    Posts
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