All categories

3 years ago

EA13.

Business

1 answer:

ioda3 years ago

4 0

Answer:

Units transferred out during the period

Material Conversion

Units Units

Beginning work-in-progress 8,329 5,580

Units started during the period 23,142 15,505

Ending work-in-progress (9,321) (6,245)

Units transferred out 22,150 14,840

Explanation:

Units transferred out during the period is the aggregate of beginning work-in-progress and units started during the period minus ending work-in-progress. Since the conversion is 67% complete, it means we will apply 67% on beginning work-in-progress of 8,329 units in order to obtain the beginning inventory of conversion. Moreso, 67% will be applied on the units started during the period of 23,142 units to obtain the units started for conversion. We will also apply 67% to the ending work-in-progress of 9,321 units so as to obtain the ending work-in-progress of conversion.

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A group of workers normally consists of 60 men, 30 women and 20 boys. They are paid at standard hourly rates as under:

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Labour cost variance = R.s 33,000 (F)
Labour rate variance = R.s 33000 (F)
Labour efficiency variance = 0

Given:

Standard Number of men = 60

Standard Number of women = 30

Standard Number of boys = 20

Standard hour rate for men = R.s 280

Standard hour rate for women = R.s 160

Standard hour rate for boys = R.s 140

Weekly working hour = 40 hours

Expected unit = 5,000 units

Number of men in march week = 70

Number of women in march week = 25

Number of boy in march week = 25

Actual wage for men = R.s 270

Actual wage for women = R.s 165

Actual wage for boys = R.s 130

Actual units = 4,500 units

Find:

Labour cost variance
Labour rate variance
Labour efficiency variance

Computation:

Labour cost variance = [SC for AO] - AC

Labour cost variance = [( 70 × 280) + (25 × 160) + (25 × 140)] - [(70 × 270) + (25 × 165) + (25 × 130)] × 40

Labour cost variance = (27,100 - 26,275 ) × 40

Labour cost variance = R.s 33,000 (F)

Labour rate variance = (SR - AR) × AH worked

Labour rate variance = [(280 - 270)70 + (160 - 165)25 + (140 - 130)25]40

Labour rate variance = [700 - 125 + 250]40

Labour rate variance = [825]40

Labour rate variance = R.s 33000 (F)

Labour efficiency variance = (SH allowed - AH worked)SR

Labour efficiency variance = (0 - 0)SR

Labour efficiency variance = 0

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