finanical performance 2013 exam 2

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

Answers

  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034
    Please try these steps before looking at my answers:

    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
  • SandyHood
    SandyHood 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
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