PEV December 2006

confused!!confused!! Well-KnownPosts: 130Registered
Hi

I wonder if anyone can help me...

What is the difference between Direct labour efficiency and Fixed overhead efficiency? I seem to always struggle with these ones :mad2:

Also, can anyone helo me understand why on task 1.1 b) the fixed overhead variance, why you have to X by the stadard labour hours per meal (0.25) and the standard usage of materials per meal (0.50) ??

Sorry if I am not making any sense but any help would be appreciated :glare:

Comments

  • SandyHoodSandyHood Font Of All Knowledge Posts: 2,034Registered, Moderator
    Overheads are absorbed on a labour hour basis (in this question).

    So the labour efficiency variance is found as the standard rate per labour hour times the difference between the standard labour hours produced less the actual hours worked;

    and the fixed overhead efficiency variance is found as the overhead absorption rate times the difference between the standard labour hours produced less the actual hours worked.

    These two variance are very closely linked, and if one is adverse the other must also be adverse.
    on task 1.1 b) the fixed overhead variance, why you have to X by the stadard labour hours per meal (0.25) and the standard usage of materials per meal (0.50) ??

    Has my earlier comment answered this?
    The standard hours per meal x the meals produced = standard hours




    My PEV revision day closest to Maidstone is on 15 November in London
    Sandy
    [email protected]
    www.sandyhood.com
  • SandyHoodSandyHood Font Of All Knowledge Posts: 2,034Registered, Moderator
    PEV (MAC) Revision in London

    15 November is now full
    Bookings can now be made for Sunday 16 November (at the same venue)
    Sandy
    [email protected]
    www.sandyhood.com
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