COST ACCOUNTING
STANDARD COSTING AND VARIANCE ANALYSIS
Question
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Labor Rate Variance


Labor Mix Variance


Labor Efficiency Variance


Total Labor Variance

Detailed explanation1: Yield variance is a measure of the difference in output. Meanwhile, mix variance is the difference in overall material usage or inputs. Specifically, material usage can vary because a mix of products or inputs is used, which are different from the standard mix.
Detailed explanation2: The total Labor variance. The sum of labor rate variance and labor efficiency variance is equivalent to the total labor variance.
Detailed explanation3: BusinessAccountingThe sum of the material mix and material yield variances equals the total material variance. the volume variance the material quantity variance. the material purchase price variance.
Detailed explanation4: (ii) When Standard and actual times of the labour mix are different : Changes in the composition of a gang may arise due to shortage of a particular grade of labour. It may be calculated as follows : LMV = (RSHAH) x SR Where, Revised Standard Hour (RSH) = Total Actual Hour/ Total standard hour X actual hour.