Cost and Management AccountingQuestion 5430 of 251
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14. During a certain period, 4,000 labour hours were utilized, and the standard hours for actual production were 5,500 hours. The Variable Overhead Efficiency Variance amounted to ` 15,000 (Favourable). Calculate the Standard Variable Overhead Rate per hour.

Options

A` 15 per hour
B` 20 per hour
C` 10 per hour
D` 25 per hour
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Correct Answer

Option A` 15 per hour

All Options:

  • A` 15 per hour
  • B` 20 per hour
  • C` 10 per hour
  • D` 25 per hour

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Detailed Solution & Explanation

Under the Flux Method, the employee turnover rate is calculated using the formula:
Labour Turnover Rate=Separations+ReplacementsAverage Number of Workers×100%\text{Labour Turnover Rate} = \frac{\text{Separations} + \text{Replacements}}{\text{Average Number of Workers}} \times 100\%
Given:
- Separations = 28
- Replacements = 78
- Average Number of Workers = 800
Labour Turnover Rate=28+78800×100%=13.25%\text{Labour Turnover Rate} = \frac{28 + 78}{800} \times 100\% = 13.25\%
Hence, **Option A** is the correct answer.

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