# finanical performance 2013 exam 2

Registered Posts: 1
hi

I'm having trouble working out the actual labour rate on 2013 exam 2 1.2b

question delta manufactures 5,400 units using 11,880, the budgeted production was 5000 units using 11250 hours at a cost of 163125. the labour rate variance was 14850 favourable.

what is the actual labour rate per hour

please can you help me to work it out

• Registered, Moderator Posts: 2,034

Budgeted cost
Budgeted hours.......= Standard rate per hour

Actual hours used x standard rate per hour = Standard labour cost of the hours worked

Standard labour cost of the hours worked +(adverse)/-(favourable) labour rate variance = Actual labour cost

Actual labour cost
Actual hours used.......= Actual labour rate per hour

Sandy
[email protected]
www.sandyhood.com
• Registered, Moderator Posts: 2,034
edited March 2016
Putting numbers in:
£163,125
...11,250.......= £14.50 per hour

11,880 x £14.50 per hour = £172,260

£172,260 - £14,850 labour rate variance = £157,410
£157,410
...11,880.......= £13.25 per hour

I hope this has helped. I also hope you are looking at this reply having attempted the answer already on your own. I hope we agree on £13.25

Yours
Sandy

[email protected]
www.sandyhood.com

I recommend
http://www.amazon.co.uk/Management-Cost-Accounting-For-Dummies/dp/1118650492#
Sandy
[email protected]
www.sandyhood.com