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= SP (SQ-AQ) = 2.25(100-110) = 22.50 (A) (b) Computation of Price variance 1) When Variance is calculated at the point of purchase Price variance

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= SP (SQ-AQ) = 2.25(100-110) = 22.50 (A) (b) Computation of Price variance 1) When Variance is calculated at the point of purchase Price variance = AQSP - AQAP = (110 x 2.25) - (110 x 2.15) = 11 (F) 2) When variance is calculated at the point of issue on FIFO basis Price variance = AQSP - AQAP = (110 x 2.25) - ([100 x 2.251 +[10 x 2.151) = 1 (F) 3) When variance is calculated at the point of issue on LIFO basis Price variance = AQSP - AQAP = (110 x 2.25) - (110 x 2.15) = 247.50-236.50 = 11 (F) p42 workers 12 6 3 2 4 Illustration 8 The standard labour complement and the actual labour complement engaged in a week for a job are as under: Skilled Semi-skilled Unskilled workers workers a) Standard no. of workers in the gang 32 b) Standard wage rate per hour (3) 1 c) Actual no. of workers employed in the 28 18 gang during the week d) Actual wage rate per hour (3) 3 During the 40 hour working week the gang produced 1,800 standard labour hours of work. Calculate 1) Labour efficiency Variance 2) Mix Variance 3) Rate of Wages Variance 4) Labour Cost Variance 4 2

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