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Variance Analysis

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Variance Analysis

  • This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • March 7, 2022 at 6:10 pm #650093
    TMaC123
    Participant
    • Topics: 20
    • Replies: 24
    • ☆

    Hi John, I wonder if you can help with this one…

    Michel has the following results.

    10,080 hours actually worked and paid costing $8,770

    If the rate variance is $706 adverse, the efficiency variance $256 favourable, and 5,000 units
    were produced, what is the standard production time per unit?

    A 1.95 hours
    B 1.96 hours
    C 2.07 hours
    D 2.08 hours

    I worked out the standard labour cost at standard hours (8770 – 706 = 8064)
    Then OAR = 8064/10080 = 0.8
    Used the OAR and the efficiency variance (£256) to work backwards to get 320 hours then calculated the standard hours for the production which is 10400
    Then divided 10400/5000 to get 2.08

    I didn’t understand the workings in Kaplan Exam Kit so mine are different, but I feel I’m over complicating it.

    Is there a simpler / quicker way to approach questions like this if one comes up in the exam?

    March 8, 2022 at 8:39 am #650172
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54682
    • ☆☆☆☆☆

    I would do it the same way as you have done 🙂

    March 8, 2022 at 3:48 pm #650250
    TMaC123
    Participant
    • Topics: 20
    • Replies: 24
    • ☆

    Thanks John, that’s reassuring

    March 8, 2022 at 4:05 pm #650257
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54682
    • ☆☆☆☆☆

    You are welcome.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Variance Analysis’ is closed to new replies.

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