good day sir
does machine breakdown affect labor efficiency, for example when explaining the causes of an adverse fixed overhead efficiency variance is it ok to say that a key piece of machinery breaking down and requiring repair before manufacturing could continue may lead to an adverse efficiency variance?
I thought it would lead to the adverse fixed efficiency variance in the sense that the overall time to finish the product will be increased by idle time hours making actual hours worked to be more. kindly help clear this confusion
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Labor efficiency variance
7y ago#1Yes - what you have written is correct :-)
thank you sir
I was confusing it with the way we treat idle time when calculating labor pay , that is if we have idle time we subtract it from the total hours so as to remain with actual hours worked. so at some point l was thinking maybe idle time should not affect our variance calculation since it will be an "indirect overhead expense" while on the other hand thinking it should
7y ago#3You are welcome :-)
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