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# Assessment 2 Task 1.2

sophie_612
LondonRegistered Posts:

**107**
Hi,

Please can someone help me with answering this question.

Thanks

Sophie

Please can someone help me with answering this question.

Thanks

Sophie

0

## Comments

107116So 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)

116107116450 x 7 = 3150

420 x 7 = 2940

3150 - 2940 = 210 favourable

107107thanks

sophie

116Having only had a quick look at this, I would try:

16,000 / 12800 = 1.25

1.25 x 14,000 = 17500

17500 - 18200 = -700 (adverse)

Let me know if I'm right or wrong though - if wrong I will have another look tonight.

107116It is the actual units x absorption rate - budgeted units x absorption rate.

We know that the absorption rate is 16,000 / 12,800 = £1.25

So that would give us 14,000 x 1.25 (17500) - 12,800 x 1.25 (16,000) = 1500 favourable

107