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Given the following information for Direct Labour: budgeted budgeted budgeted Employee labour hours labour rate labour cost (in hours) (in $/hour) (in $) Senior 40
Given the following information for Direct Labour:
budgeted | budgeted | budgeted | |
Employee | labour hours | labour rate | labour cost |
(in hours) | (in $/hour) | (in $) | |
Senior | 40 | 30.00 | 1,200 |
Junior | 480 | 20.00 | 9,600 |
Temporary | 120 | 15.00 | 1,800 |
actual | actual | actual | |
Employee | labour hours | labour rate | labour cost |
(in hours) | (in $/hour) | (in $) | |
Senior | 60 | 30.10 | 1,800 |
Junior | 490 | 20.02 | 9,800 |
Temporary | 80 | 14.90 | 1,200 |
The budget is based on production of 40 units. Actual production was 45 units.
Requried:
Calculate the following variances:
- Labour Rate
- Labour Efficiency
- Labour mix variance
- Labour yield variance
- Assume that the Labour rate and Labour yield variances are inter-linked. Give a possible explanation for the mix and yield variances.
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