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(0.50.51))
Usage Variance = 5000 Adverse ((6000x(1011.67))
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
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