Mix Variances

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:

1. Labour Rate
2. Labour Efficiency
3. Labour mix variance
4. Labour yield variance
5. Assume that the Labour rate and Labour yield variances are inter-linked. Give a possible explanation for the mix and yield variances.