# Assessment 1 task 1.2

james22
Posts:

**1**Registered
Please could someone help and explain the answers to this question. I thought i had cracked variances but i cant get my head around this question.

Budget: Actual

Production- cartons 5,000 6000

Apricots- kg 50,000 70,000

Apricots- £ 25,000 36,000

Direct labour hrs 1,000 800

Direct labour £ 10,000 8,000

Apricots price variance?

Apricots usage variance?

Direct labour rate variance?

Direct labour efficiency variance?

Any help would be greatly appreciated.

Thanks in advance

Budget: Actual

Production- cartons 5,000 6000

Apricots- kg 50,000 70,000

Apricots- £ 25,000 36,000

Direct labour hrs 1,000 800

Direct labour £ 10,000 8,000

Apricots price variance?

Apricots usage variance?

Direct labour rate variance?

Direct labour efficiency variance?

Any help would be greatly appreciated.

Thanks in advance

## Comments

2RegisteredUsage Variance = 5000 Adverse ((6000x(10-11.67))

DL Rate Variance = 0 no variance ((10000/1000)-(8000/800))

DL Efficiency Variance = 4000 Favourable ((6000x0.2x10)-(800x10))

12RegisteredI still do not understand this task;

why £70,000 x (0.5 - 0.51) = 1000 A

I now the formula

Actual Qty purchased x actual rate

Actual qty purchased x standard rate

Diff = price variance

If you could please explain this to me I would be very grateful.

Thanks,

Silia

72Registereddnatalie has used a rearranged formula that gets the same result.

Actual Qty * standard rate - Actual Qty * actual rate == Actual Qty * ( standard rate - actual rate)

70,000 * (25,000/50,000) - 70,000 * (36,000/70000) == 70,000 * (0.5 - 0.514) = -1,000 therefore 1000 A

This follows for the other answers given.

12Registered