# Task 6b practice assessment 2

sophie_612
LondonRegistered Posts:

**60**
Hi,

I know how to work out most of this but i'm stuck on actual mins per item, rate variance, efficiency variance and variance %. i have my exam next week and i'm panicking i feel like I've forgot everything.

Thanks

Sophie

I know how to work out most of this but i'm stuck on actual mins per item, rate variance, efficiency variance and variance %. i have my exam next week and i'm panicking i feel like I've forgot everything.

Thanks

Sophie

## Comments

2I'll just work my way down the question so it flows.

Standard cost is standard minutes of 35 mins per item converted into hours, so ((35/60)x actual items 5000) then multiply by standard hourly rate of £12 to get 35000 as your flexed budget. So, your variances for rate and efficiency should tie back to actual cost of £31250 - £35000, so we are looking for 3750 F all together.

actual minutes per item, so its actual hours 2500 / actual items 5000 = 0.5 HOURS per item, but you need to know minutes so times 0.5 x 60 = 30 minutes.

RATE variance - how much we shouldve spent on labour. We shouldve spent standard £12 per hour. 12 x actual hours of 2500 = 30,000 but we actually spent £31250 as per the question so variance of £1250 ADV

EFFICIENCY- how many hours we shouldve spent times by standard rate.

standard is 35 mins. So 35/60 x actual items = 2916.666667 hours. Actual hours were 2500. 2916.666667-2500 = 416.6666667 HOURS fav. Times the hours variance by standard hourly rate of £12 and you get £5000 FAV

£5000 F and £1250 A gives you £3750 FAV all together as per original.

cost variance percentage is simply £3750 / standard flexed budget of £35000 x100 to get % = 10.7

Hope this makes sense!

60> Actual costs are £31250, actual hours are 2500 and actual items made are 5000.

>

> I'll just work my way down the question so it flows.

> Standard cost is standard minutes of 35 mins per item converted into hours, so ((35/60)x actual items 5000) then multiply by standard hourly rate of £12 to get 35000 as your flexed budget. So, your variances for rate and efficiency should tie back to actual cost of £31250 - £35000, so we are looking for 3750 F all together.

>

> actual minutes per item, so its actual hours 2500 / actual items 5000 = 0.5 HOURS per item, but you need to know minutes so times 0.5 x 60 = 30 minutes.

> RATE variance - how much we shouldve spent on labour. We shouldve spent standard £12 per hour. 12 x actual hours of 2500 = 30,000 but we actually spent £31250 as per the question so variance of £1250 ADV

>

> EFFICIENCY- how many hours we shouldve spent times by standard rate.

> standard is 35 mins. So 35/60 x actual items = 2916.666667 hours. Actual hours were 2500. 2916.666667-2500 = 416.6666667 HOURS fav. Times the hours variance by standard hourly rate of £12 and you get £5000 FAV

>

> £5000 F and £1250 A gives you £3750 FAV all together as per original.

>

> cost variance percentage is simply £3750 / standard flexed budget of £35000 x100 to get % = 10.7

>

> Hope this makes sense!

@Kdriver1 thank you so much for taking the time to write all this for me