• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Variances

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Variances

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 12, 2021 at 5:08 am #624866
    xyzc
    Participant
    • Topics: 363
    • Replies: 130
    • ☆☆☆

    A business makes another product. The learning effect stopped after the 16th batch of product, and a steady state was reached. Workers in the business received 15 per hour. The first batch took 0.75 hours to produce. The 16th batch took 0.5 hours and the standard cost was revised to this figure once the steady state was reached. The business produced 10000 batches during the year.
    What is the favourable labour efficiency planning variance?

    In the above question, I thought that 0.5 hours should be taken as the budgeted figure instead of being considered as revised figure because this is where the steady rate has been reached, and the figure of 0..75 hours should neither be considered as the budgeted nor the revised figure because it is the time for the first batch, and therefore irrelevant whereas the time for the 16th batch should be taken as the budgeted figure. So is it correct?

    June 12, 2021 at 7:54 am #624899
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51576
    • ☆☆☆☆☆

    Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answers and so you would know whether or not you are correct (and could then ask about anything in the answer about whatever you were not clear about).

    From what you have typed it would appear that they originally budgeted on there being a learning rate to apply to all 10,000 batches (and you can calculate the learning rate they applied because you know how long the 16th batch took).

    In fact the learning rate stopped after 16 batches and the standard time changed to 0.5 hours.

    So the planning variance is the difference between the original budgeted cost for the batches above 16 and the revised cost per batch for the batches above 16.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • John Moffat on Relevant Cash Flows for DCF – Inflation effective rates – ACCA Financial Management (FM)
  • John Moffat on FM Chapter 17 Questions – The cost of capital
  • John Moffat on FA Chapter 6 Questions Depreciation
  • misslatif on Relevant Cash Flows for DCF – Inflation effective rates – ACCA Financial Management (FM)
  • joenamakhwa on FM Chapter 17 Questions – The cost of capital

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy