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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › question

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
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  • June 29, 2021 at 3:22 pm #626605
    xyzc
    Participant
    • Topics: 413
    • Replies: 175
    • ☆☆☆☆

    The first item of a new product took 2000 hours to manufacture (at a labour cost of 15 per hour). A 90% learning curve was expected to apply, and it was decided to establish a standard time as the time required to manufacture the 50th item of the product, rounded to the nearest hour. The 50th item actually took 980 hours.
    What is the labour efficiency variance for the 50th unit and whether it is favorable or adverse.
    I calculated the variance to be 631.7238 adverse, but at the back of the book it has been given as 645. So is my answer also correct or is it wrong.

    June 29, 2021 at 5:10 pm #626622
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54738
    • ☆☆☆☆☆

    The difference might be due to rounding (which is irrelevant for the exam just as it is in real life).

    I cannot see your workings and so I have no idea whether you are right or wrong (but surely you can check from the workings in the printed answer!!).

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