CIMA BA2 · Chapter 7 · Question 12 of 14
The labour efficiency variance for a period was $2,400 favourable. The standard rate is $16 per hour, the standard time is 1.5 hours per unit, and 9,000 hours were worked. How many units were produced?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 6,100 units
Explanation
Favourable variance in hours = $2,400 / $16 = 150 hours, so standard hours for actual output exceeded actual hours. Standard hours = 9,000 + 150 = 9,150. Units produced = 9,150 / 1.5 = 6,100 units.
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