Assessment 2 Task 1.2

Hi,

Please can someone help me with answering this question.

Thanks
Sophie


Comments

  • sophie_612sophie_612 LondonRegistered Posts: 79
    @CornishPixie do you know how to work this one out?
  • CornishPixieCornishPixie Registered, MAAT, AATQB, AAT Licensed Accountant Posts: 66
    Hi there.

    So first, you need to work out your standard costs.

    36/3 = £12 per standard kg
    1.5 x 300 = 450 standard hours
    22.5/1.5 = £15 per standard hour

    Then just use the calculations to get the variance.

    So for materials usage: (300 x 3kg x 12) - (960 x 12) = -720 (adverse)
    labour rate variance: (1.5 x 300 x £15 ) - 7140 = -390 (adverse)
    Variable overhead efficiency variance: (10.50 x 450) - (10.5 x 420) = 315 (favourable)
  • CornishPixieCornishPixie Registered, MAAT, AATQB, AAT Licensed Accountant Posts: 66
    Having a rethink on the VOEV as I now get 210 favourable.
  • sophie_612sophie_612 LondonRegistered Posts: 79

    Having a rethink on the VOEV as I now get 210 favourable.

    @CornishPixie thanks for that, now that you get 210 do i need to do a different calculation?
  • CornishPixieCornishPixie Registered, MAAT, AATQB, AAT Licensed Accountant Posts: 66
    Yes, so you need to take the 10.5 standard hours and divide by the 1.5 standard hours to give you 7.

    450 x 7 = 3150
    420 x 7 = 2940
    3150 - 2940 = 210 favourable
  • sophie_612sophie_612 LondonRegistered Posts: 79
    @CornishPixie thank you for this :) i also sent you a message about the other task from yesterday
Sign In or Register to comment.