Direct labour efficiency variances, Cost Accounting

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.

Posted Date: 2/7/2013 6:46:30 AM | Location : United States







Related Discussions:- Direct labour efficiency variances, Assignment Help, Ask Question on Direct labour efficiency variances, Get Answer, Expert's Help, Direct labour efficiency variances Discussions

Write discussion on Direct labour efficiency variances
Your posts are moderated
Related Questions
WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PATTERNS

Weston Corporation manufactures a product that is available in both a deluxe and a regular model. The company has made the regular model for years; the deluxe model was introduced

Reconciliation of Profits Reconciliation of profits disclosed by Financial Accounts and Costing Accounts in an interlocking system, While interlocking cost accounting system

Forbes Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the period, the company estimated manufac

Job Costing This is a costing method that is applied when a job or cost unit is relatively of small size, is undertaken to fit the customer's specifications and is of compara

question and answer: XYZ trading purchased 6,850 killos of material at a total cost of 21,920.00. The material price variance was 1,370.00 favorable. The standard price per killo w

Stock control and its Level Management must formulate decisions regarding to the control of stock levels along with a view to minimizing the cost of the company whereas achie

Inventory Management and Control Here the objectives of inventory management are as: 1. To ensure adequate stocks to permit for continuous production/operations, and

how the NHS might use ABC to (a) produce ‘product costs’ for services, and to (b) evaluate the internal efficiency, quality and profitability per product or service line. Both bene

Conan O'Brien Logging and Lumber Company owns 3,300 acres of timberland on the north side of Mount Leno, which was purchased in 2000 at a cost of $650 per acre. In 2012, O'Brien be