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International Co. is a multiproduct firm and operates standard costing and budgetary control em. During the month of June firm launched a new product. An
International Co. is a multiproduct firm and operates standard costing and budgetary control em. During the month of June firm launched a new product. An extract from performance report epared by Sr. Accountant is as follows: Particulars Budget 30 units 180.74 hrs. 1,19,288 Actual 25 units 118.08 hrs. 79,704 Output Direct Labour Hours Direct Labour Cost Sr. Accountant prepared performance report for new product on certain assumptions but later on he realized that this new product has similarities with other existing product of the company Accordingly, the rate of learning should be 80% and that the learning would cease after 15 units. Other budget assumptions for the new product remain valid. The original budget figures are based on the assumption that the labour has learning rate of 90% and learning will cease after 20 units, and thereafter the time per unit will be the same as the time of the final unit during the learning period, i.e. the 20th unit. The time taken for 1st unit is 10 hours. Required Show the variances that reconcile the actual labour figures with revised budgeted figures in as much detail as possible. Note learning curve are -0.152 and-0.322 respectively The learning index values for a 90% and a 80% log 2 0.3010, log 3 0.47712, log 5 0.69897, log 7 0,8451, antlog of 0,6213 4.181, antilog of 0.63096 4.275]
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