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Hi,
Is there a typo in the answer to the variance in Labour efficiency variance (61,500 – 57,600) x 12 = 46,800. I calculated it as (61,500-56600) x 12 = 58,800 Adverse.
I got 56,600 by taking the total amount of hours = 62,000 and taking away the idle time of 5,400 = 56,600.
https://www.accaglobal.com/content/dam/acca/global/pdf/f5_2010_jun_q.pdf
Thanks
Sean
There is no typing error.
The actual hours worked were 61,500.
The standard hours for the actual production of 19,200 units are 19,200 x 3 hours = 57,600 hours.
The efficiency variance is the difference, costed at the standard cost per hour.
For efficiency we always simply compare the actual hours worked with the standard hours for the actual production.
You should watch the free lectures on basic variances where I explain all of the basic Paper F2 variances.
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