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25000 Standard rate per unit -50 p. per unit. 10000 (c) Calculation of Standard Cost Actual production Standard rate 10,200 units x 50 p. per
25000 Standard rate per unit -50 p. per unit. 10000 (c) Calculation of Standard Cost Actual production Standard rate 10,200 units x 50 p. per unit = 25,100 (1) Rate Variance: As the actual wage rate has deviated from the standard in respect of only 15 workers from out of a total of 100 workers, wages rate variance would be calculated only in respect of these 15 workers. Actual Hours (Standard Rate - Actual Rate) Therefore, 500 Hours (61 - 80 p.) - 2100 (F) 250 Hours (31 - 31.20) = 250 (A) Thus, the total rate variance is 250 (F). (HI) Efficiency Variance: Efficiency variance is indicated by the fact that, as compared with standard production of 10.000 units (200 units 50 hours), the actual production is 10.200 units Standard Rate (Standards Hours - Actual Hours) 31 (5,100 - 5,000) = 2100 favourable. Calculation of Standard Hours: 5000 *10200 = 5,100 hours 10000 Yield Variance: Standard labour cost per unit of output (SY-AY) 35 0.50 (10,000 - 10.200) = 2100 (F) Verification: Cost Variance = Rate Variance + Efficiency Variance 3150 (F) = 50 (F) + 3100/F 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 (b) Standard wage rate (Rupees per hour) (c) Actual number of workers employed during the month in the group 24 (d) Actual wage rate per hour(e) 20 10 12 15 10 10 8 12 8 24 During the month of 200 working hours, the group produced 9,500 standard hours of work. You are required to calculate: Wage rate variance; (i) Labour efficiency variance: (I) Labour mix variance and (w) Total labour cost variance
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