Principles of Managerial Accounting · free preview
Computing and Evaluating Labor Variances
Labor variances split into a rate variance from paying more or less than the standard wage and an efficiency variance from using more or fewer hours than the standard, separating wage negotiation from workforce productivity.
1. Mirroring the materials split
Mirroring the materials split
2. The formulas
The formulas
3. Reading the causes
Reading the causes
4. Interaction with materials variances
Interaction with materials variances
5. Rate variance formula
Which formula computes the labor rate variance?
6. Rate variance computation
5,400 hours are worked at 20.50 dollars against a 20.00 dollar standard rate. Compute the rate variance.
7. Standard hours allowed
The standard is one hour per unit, and 5,000 units are produced. Compute standard hours allowed.
8. Efficiency variance computation
Actual hours are 5,400 against 5,000 standard hours allowed, at a 20.00 dollar standard rate. Compute the efficiency variance.
9. Efficiency variance synonym
The labor efficiency variance is also called the labor ____ or usage variance. One word.
10. Rate variance synonym
The labor rate variance is also called the labor wage or ____ variance. One word.
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