FPFM sample assessment 1

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Registered Posts: 1
Hi all,

just wondering if anyone can help me with FPFM sample assessment question 1.3 © capacity variance

My calculation is some how wrong when I check the answers

MY CALCULATION

480000hrs/64000units*67000units=502500hrs

536000hrs-502500hrs=33500hrs

3840000/480000=8 per hr

I have figured that i must be doing calculation for the next part which is efficiency variance as the actual figure are the same but obviously favourable as it is efficiency.

• Registered Posts: 182 Dedicated contributor 🦉
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Well you've figured out the answer from the Q.B answers at the back, and I have just had a go as well and figured that Actual production of 67000 units*7.5hrs should have taken 502,500 hrs but may be the production staff were slow and perhaps took little longer to produce each unit ie. that is 8 hrs (536000hrs*67000units) therefore giving a variance of 33,500 hrs and if you times 33500@ std cost per hr of £8 it gives you an adverse variance of £268000. I also had to look at the answer at the back to try and work out. Hope this helps!