variances

This topic has 3 replies, 2 voices, and was last updated 11 years ago by John Moffat.

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May 31, 2015 at 7:14 am #250790
saifudeen
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hi sir below is the question from your mock
each widget take 0.5 hrs t0 make , stnd rate of pay is $10 per hour . idle time is expected to be 5% of hours paid . they actually produce 10800 units they pay $50000 for 6000 hrs of which 330 hrs are idle time .
what is the excess idle time variance and labour efficiency variance .

please reply sir , this will be most probably my last post before f5 exam and thanks aloot fr your hellp and support . pray for us !
May 31, 2015 at 10:59 am #250891
John Moffat
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Actual idle time = 330 hours.

Standard idle time = 300 hours.

So extra 30 hours idle.
Cost out at the standard cost per hour of work, which is 10/0.95 = 10.53
30 x 10.53 = 315

Actual hours worked = 6000 – 330 = 5670
Std hours for actual production = (10800 x 0.5) = 5400

So efficiency variance = (5670 – 5400) x 10.53 = 2843

Good luck tomorrow 🙂
May 31, 2015 at 11:38 am #250921
saifudeen
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sir , i didnt get how u calculatd stnd cost per hour of work .
can u make it clear ?
May 31, 2015 at 2:54 pm #250980
John Moffat
Keymaster
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You need to watch the free lecture on advanced idle time. The standard rate of pay is $10, but the standard working time is only 95% of the time paid for.
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