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Variances

Forums › ACCA Forums › ACCA PM Performance Management Forums › Variances

  • This topic has 4 replies, 3 voices, and was last updated 14 years ago by Anonymous.
Viewing 5 posts - 1 through 5 (of 5 total)
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  • November 11, 2010 at 7:27 pm #45891
    dolphinslover
    Member
    • Topics: 26
    • Replies: 15
    • ☆

    what is labour rate and labour efficiency variance ??
    why do we calculate it ?

    November 13, 2010 at 8:03 am #70416
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 63
    • ☆☆

    Labour rate variance is the difference between actual hour worked at standard rate and actual labour cost.
    Labour efficiency variance is the difference between standard hour worked and actual hour worked value at standard rate per hour. Standard hour = standard hour per unit x actual unit.
    Purpose of calculating it is of course for reporting and control purpose. You can identify which area is different from standard and take control if it is significant.

    November 13, 2010 at 5:46 pm #70417
    dolphinslover
    Member
    • Topics: 26
    • Replies: 15
    • ☆

    how would u know if the answer got is favourable or adverse ?

    November 13, 2010 at 11:48 pm #70418
    admin
    Member
    • Topics: 249
    • Replies: 731
    • ☆☆☆☆

    Guys
    Why don’t you watch lectures on variances, in f5 resources section here on the site
    It would make your life easier

    November 14, 2010 at 10:09 am #70419
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 63
    • ☆☆

    By common sense, for example, if you are paying more than what you should be paying, then it is adverse variance.

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