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In the BPP revision kit, in a mock exam, one of the questions is:
A paint manufacturer uses skilled staff to operate the machinery that converts the raw materials for
the paint into the finished product. The standard direct labour hours for each 100 litres of white paint
produced are as follows: 8 direct labour hours at $24 per hour.
During February, 640 direct labour hours were worked at a total cost of $16,500. It has now been
realised that a new wage rate of $26 per hour had been agreed with the workers.
Required(ii) Calculate the operational labour rate variance..
I’m stuck. the answers show :
Operational labour efficiency variance
7,800 litres should have taken…Where did they get the 7,800 from?
Thank you
Sorry but on what you have typed, I have no idea where 7,800 comes from!!
(If you say which number question in which of the mock exams, then I will happily look at it for you (but I don’t have the time to search through every question now looking for it 🙂 )
I have found it 🙂
The question does not give enough information to be able to calculate the efficiency variance! It seems to be another error by BPP (both BPP and Kaplan do have a lot of errors in the Revision Kits this time).
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