- This topic has 3 replies, 2 voices, and was last updated 11 years ago by
.
-
Posts
-
a company has a budgeted labour cost of $360,000 for the production of 60,000 units per month. Each unit is budgeted to take 3 hours of labour
The actual cost during the month was $320,000 for 28,000 units and 85000 hours were worked. What was the labour efficiency variance?labour efficiency variance= budgeted hours worked – actual hours * actual rate
budgeted hours= 3 hours*28000 units= 84,000 hours
actual hours = 85,000 hours
rate=$320,000/85,000 units=3.76
labour variance= [84,000- 85,000] *3.76=3760Whats wrong here?
The efficiency variance is costed at the standard cost per hour, not the actual cost.
The standard cost per hour is $2.how did you calculate the standard cost per hour? can i see the correct calculation for the labour efficiency please?
- You must be logged in to reply to this topic.