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John Moffat.
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Noah098- Topics: 270
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“If standard costs have been calculated without taking into account the learning effect, then all the labour usage variances will be favourable because the standard labour hours that they are based on will be too high. This will make their use for control purposes pointless.”
Sir I don’t understand this statement esp. the part that talks about Labour usage variance being favourable.
John Moffat- Topics: 56
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In future you must ask in the Ask the Tutor Forum if you want me to answer. This forum is for students to help each other.
If there is a learning effect then the labour used will reduce. If the standard time per unit ignored the learning effect then the actual time taken will be lower than the standard time and so there will be a favourable labour usage variance.
Noah098
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