FPFM sample assessment 1

rachy85

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

33500hrs* £8= £268000 adverse

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.

please help thanks

zippi

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!