PEV November 2004 ,Task 1.2
Ora
Registered Posts: 1 New contributor 🐸
Could anyone help me with this question PEV ,November 2004 Task 1.2 answer to purchasing Manager
Many Thanks
Many Thanks
0
Comments
-
WE know the production manager is likely to be held responsible for 2 variances:
- Material usage £5,200 adverse
- Labour efficiency £3,900 adverse
The inferiority of the 500 kgs of material would explain part of the £5,200 adverse variance. Afterall, he used 20,800 kgs when 6,500 units should use 19,500 kgs. But he isnot fully excused. 500 kgs on top of the expected 19,500 kgs only comes to 20000 kgs. So the £5,200 variance can be split into £2,000 which is due to the faulty material, and £3,200 which is still unexplained, and we can conclude the fault of poor production management.
As for the labour, 150 hours to wash down the machines does sound a lot but we can accept until more information is provided.
150 hours out of the 7,150 hours still leaves 7,000 hours worked on production. If the standard hours for 6,500 units is 6,500, then 500 hours work is still unexplained. This leaves us with £6 x 150 hours = £900 adverse vefficiency variance due to time needed to clean up after faulty material and 500 x £6 = £3,000 labour efficiency variance due to poor production management.Sandy
sandy@sandyhood.com
www.sandyhood.com0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 321 NEW! Qualifications 2022
- 164 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership