Unit 33 - MAC

mfernott Registered Posts: 32 Regular contributor ⭐
Hi Guys and Girls

I'm struggling with Management Accounting! I just can't remember the formulas used to calculate the variances in efficiency, labour etc.

I know the formulas I just can't memorise them!

Anyone got any tips?



  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
    Think about what you are trying to show rather than trying to learn formulas.

    Labour efficiency
    How many hours does the standard time say that the units produced should have taken?
    How many hours did it take?
    Was the standard time more? (So our workforce must have been more efficient than the standard would expect) A favourable variance
    Was it less? (An adverse variance)
    And how much was the difference in hours worth at the standard rate per labour hour.

    Not a formula in sight, but whenever you think of a manufacturing setting visualise what the standards say should happen, then compare it with the actual results and make sensible suggestions about what you think caused it.
  • mfernott
    mfernott Registered Posts: 32 Regular contributor ⭐
    Thanks Sandy!
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