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Typical Causes of Labour Variances
Labour Rate Variances
a) Higher rates being paid than planned because of wage raise awards.
b) Lower or Higher grade of workers being utilized than planned.
c) Payment of unplanned overtime or bonus.
Labour Efficiency Variances
a) Use of incorrect grade of labour as like poorly trained personnel.
b) Poor workshop organization or supervision.
c) Incorrect materials or machine problems.
d) Employ of better quality labour
e) Decrease labour or increase labour efficiency.
Polycorp Limited Steel Division is considering a proposal to purchase a new machine to manufacture a new product for a potential three year contract. The new machine will cost $1
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BEP- Break Event Point: It shows no Loss and no Profit The level of activity at which, total revenues equivalent total costs. A point at which there is no profit and no loss.
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