From the following information, calculate labour cost variance, labour rate variance, Labour efficiency variance and labour yield variance and verify your answer. Standard Output: 1,000 units Rate of payment: Sh.6 per unit Time taken: 50 hours. Actual Actual output: 1,200 units Wages paid: Sh.8,000 Time taken: 40 hours
From the following information, calculate labour cost variance, labour rate variance, Labour efficiency variance and labour yield variance and verify your answer. Standard Output: 1,000 units Rate of payment: Sh.6 per unit Time taken: 50 hours. Actual Actual output: 1,200 units Wages paid: Sh.8,000 Time taken: 40 hours
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:From the following information, calculate labour cost variance, labour rate variance, Labour efficiency variance and labour
yield variance and verify your answer.
Standard
Output: 1,000 units
Rate of payment: Sh.6 per unit
Time taken: 50 hours.
Actual
Actual output: 1,200 units
Wages paid: Sh.8,000
Time taken: 40 hours
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