Direct labour efficiency variances, Cost Accounting

Assignment Help:

Direct Labour Efficiency Variances

It is the difference between the standard hours allowed for the actual production achieved and the hours actually worked, all valued at THE standard labour rate.  Using an equation, this can be shown as given:

Direct labour Efficiency Variance = (actual labour hours x standard rate) - (standard hour hours x standard rate)

(AHrs x SR) - (SHrs x SR)

Factoring SR out of the equation we obtain

Direct Labour efficiency variance = SR (AHrs - SHrs).

Therefore the direct labour efficiency variance arises because of the actual hours utilized in production varying from the standard hours expected to have been utilized.


Related Discussions:- Direct labour efficiency variances

Who would be affected if the proposal is implemented?, Outdoors R Us owns s...

Outdoors R Us owns several membership-based campground resorts throughout the Southwest. The company sells campground sites to new members, usually during a get-acquainted visit an

Internal rate of return, With the internal rate of return, how can a compan...

With the internal rate of return, how can a company use the ROI methodology as a realistic measurement? Please discuss the pros & cons of each measurement statistic.

Compute the annual depreciation on the new equipment, Goldman Corporation b...

Goldman Corporation bought a machine on June 1, 2010, for $44,838, f.o.b. the place of manufacture. Freight to the point where it was set up was $282, and $705 was expended to inst

Reasons for overhead variances useful for control reasons, Reasons for Over...

Reasons for Overhead Variances Useful for Control Reasons Overhead variances are essentially a book balancing exercising giving an arithmetic reconciliation between the actual

Mr., behabioural aspect of standard costing on budget

behabioural aspect of standard costing on budget

Profit analysis and cost volume or cvp analysis, Profit Analysis and Cost V...

Profit Analysis and Cost Volume or CVP Analysis CVP Analysis checks the relationship between profit, activity level and the cost. CVP Analysis assists in a broad range of p

Elements of cost, Elements of Cost Nearly there are three elements of c...

Elements of Cost Nearly there are three elements of cost - labor, material, and expenses. These are additional divided into indirect and direct material, indirect and direct la

Calculate the fixed costs to the two products, Herrestad Company does produ...

Herrestad Company does produce and sell two products and the details below will be used to prepare a segmented income statement (showing the income for each product and the total)

Weighted average method, Weighted Average Method This way is a perpet...

Weighted Average Method This way is a perpetual weighted average system whereas the issue price is recalculated after one of receipt of stocks taking into accounts both money

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd