The previous background is not really relate to this part so I did not post it t

Question

The previous background is not really relate to this part so I did not post it together. About the first part, I think direct Labour rate variances and direct Labour efficiency variances will most likely effect since the actual hours will increase due to the unscheduled maintenance. I have no idea about part 2 Thanks (c) The Production Manager for the ProPowder product has complained that for two months in the past year, the Maintenance Division conducted unscheduled maintenance during the course of regular working hours. Consequently, workers had to work overtime to avoid a production backlog. (i) Identify the two variance calculations that this issue would most likely affect, explaining why these variances calculations will be affected. (3 marks) (ii) How should this information about unscheduled maintenance be taken into account when assessing variance analysis on the Production Manager's performance in managing the efficiency of his production staff? (2 marks)

Explanation / Answer

a) It will impact these two variance Direct Labour Rate Variance and Direct Labour Quantity Variance (or Direct Labour Efficiency Variance).

Direct Labour Rate variance will be impacted due to increased rate for working in overtime.

Direct Labour Quantity variance will be impacted due to increased hours.

b) Production Manager can use this information in assessing the performance for managing the efficiency of the staff by allocating the excess cost due to this unscheduled maintenance to the maintenance department. A report can be appended and produced to the management stating that due to this unscheduled maintenance X number of hours have been extra used to fullfill the production backlog.

Thus, the idle hours during day time and its cost plus extra charges for working those hours in overtime can be presented separately and show as impact due to unscheduled maintenance.

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