The standard labour component and the actual labour component engaged during the month are given below SkilledSemi- SkilledUnskilled(a) Standard number of workers in a group301010(b) Standard wage rate (Rupees per hour)20128(c) Actual number of workers employed during the month in the group241512(d) Actual wage rate per hour (Rs per hour)24108During the month of 200 working hours, the group produced 9,600 standard hours of work. You are required to calculate:(i) Wage rate variance;(ii) Labour efficiency variance;(iii) Labour mix variance and(iv) Total labour cost variance.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The standard labour component and the actual labour component engaged during the month are given below

	Skilled	Semi- Skilled	Unskilled
(a) Standard number of workers in a group	30	10	10
(b) Standard wage rate (Rupees per hour)	20	12	8
(c) Actual number of workers employed during the month in the group	24	15	12
(d) Actual wage rate per hour (Rs per hour)	24	10	8

During the month of 200 working hours, the group produced 9,600 standard hours of work.

You are required to calculate:
(i) Wage rate variance;
(ii) Labour efficiency variance;
(iii) Labour mix variance and
(iv) Total labour cost variance.

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