Small doubt in std costing

The answer is as follows:-

In the above question ...The hours to be accounted for variable overhead is Machine hours given and not the labour hours.but in case machine hours in not mentioned in the question. Then v can  take the labour hours in place of  SH or AH calculation for all the 3 related areas.       (ie: for LABOUR, V.O.H,& F.OH variance calculation). 

since the answer is based on machine hours for V.O.H Variance .The labour hrs. application will not give correct answer.However in any case u cann't use both (machine hrs.as well as labour hrs) at the same time.

Forget about machine hrs & labour hrs concept.

Take it dis way:

" For Product X (Rs pu),

VOH = 2 lab hrs @ Rs 4ph = Rs.8 pu

5450 units were made compared to budgeted production of 5500u

AVOH Labour related =Rs 42000

Actual 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 not same in labour hrs. Why?

look dhivya

let us first understand the meaning of SO and SH

SO=Expected output  for actual hours worked.

SH=Expected  hours for actual output 

now see ur answer

SR (per hr)=4/- 

SR (per unit)=8/-

SH= (5450 units * 2/-per hr.)=10,900 hrs.

SO=10800 hrs./2 hrs per unit =5400 units

AH=10800 hrs.

AO=5450 units.

NOW U VERIFY....UR ANSWER ..... ITS SAME IN BOTH THE CASE

still if u have any doubt in this issue .

u r most WELCOME