The Question reads as follows...
" For Product X (Rs pu),
VOH = 4mach hrs @ Rs 8ph = RS.32 pu
2 lab hrs @ Rs 4ph = Rs.8 pu
5450 units were made compared to budgeted production of 5500u
AVOH (Machine related) =RS 176000
(Labour related) =Rs 42000
Actual Mach hrs = 22000
Lab hrs = 10800"
In the calculation for finding efficiency variance,
Efficiency Variance = (SH * SR ph) or (AO * SR pu) minus (SO * SR pu) or (AH * SR ph)
Here, SO * SR pu & AH * SR ph are same in machine hrs but not in labour hrs. Why?
Please reply......
Ref: Paduka, illustration 18(June 2011 edition),
CAclubindia
