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- This topic has 3 replies, 2 voices, and was last updated 2 years ago by John Moffat.
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- March 7, 2022 at 6:10 pm #650093
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 hoursI 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 2.08I 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 #650172I would do it the same way as you have done 🙂
March 8, 2022 at 3:48 pm #650250Thanks John, that’s reassuring
March 8, 2022 at 4:05 pm #650257You are welcome.
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