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thank you very much for your help.
Can you please help me with this question.Fawleys direct labour cost data relating to last month were as follows .
standard labour cost of actual hours worked 116000
standard hours worked 30000
standard rate per hours 4
labour rate variance 5800 F
labour efficiency Variance. 4000 F
what is the actual rate of pay per hour.the answer from the book says 3.8. however there is no explanation as to how the Actual hours have been calculated. I have gone through the Variance analysis chapter and I have grasped the knowledge fully and have done several times without having any problem. however i am struggling to find not all but some questions from just extracts.
Can you please explain to me how the Actual hours worked in this question which is 29000 have been calculated . Many thanks.
the only possible answer i can think about is that.
Given that the standard labour cost of actual hours worked is 116000. there is no need for labour rate variance of 5800 F so I have taken away from 5800 giving 110200. since i cant able to find the Actual hours i have divided the budgeted hours of 30000. giving an answer of 3.67 but still I cant able to find the actual hours worked.
My apologies for typing this pit I thought its good idea to show that i Have tried the question before asking for an answer. thank you very much i appreciate for your help.Given that the efficiency variance is 4,000 (F), they must have worked 4,000/4 = 1,000 hours less than standard.
Since the standard hours were 30,000, the actual hours worked must have been 30,000 – 1,000 = 29,000 hours.
As you have written, the actual total labour cost must have been $110,200, and so the actual rate of pay must have been 110,200 / 29,000 = $3.80 per hour.
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