Assessment 1 task 1.2
james22
Registered Posts: 1
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
0
Comments
-
Price Variance= 1000 adverse ((70000x(0.5-0.51))
Usage 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))0 -
Hi guys,
I 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,
Silia0 -
Hi Silas
dnatalie 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.AAT Level 4, MAAT
ACCA in progress
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Thank you so much !!! You are a lifesaver ?0
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Hi Sorry, where is the 0.2 coming from? DL Efficiency Variance = 4000 Favourable ((6000x0.2x10)-(800x10)). Many thanks0
-
@LouboutinLou1
It's from converting the labour time into a per unit time. 1000/ 5000 = time/unit = 0.2.AAT Level 4, MAAT
ACCA in progress
F4- Passed Aug 2020
F5- Passed Dec 2020
F6- Passed Sep 2020
F7- Passed June 2021
F8 - Passed Sep 2021
F9 - Passed June 2021
SBL -
SBR - Passed Mar 22
ATX - Passed Dec 21
APM - Passed June 220
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