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Which of the following would explain a labour efficiency planning variance?
(1) A change in employment legislation requiring staff to take longer rest periods
(2) Customers demanding higher quality products leading to a change in product design
(3) The learning effect for labour being estimated incorrectly in the production budgetPlease Explain (3) Point,
I think Its Controllable for manager and should be treated in Operational VarianceThe question is nothing to do with operational and planning variances. Efficiency variances can be planning or operational.
However here it would be more of a planning variance because the budgeted figures were wrong. Any errors in the budget are planning variances as I explain in my lectures. It would be an operational variance if the manager had improved the learning above what it had been before, but here it says that it had been estimated wrongly.
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