COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Direct Labour Price Variance =Direct Labour Price Variance + Direct Labour Efficiency Variance
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Direct Labour Price Variance =(AR x AH)-(AH x SR)
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Direct Labour Price Variance =(AR x SR)-(SR x AH)
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Direct Labour Price Variance =(AR X SR)-(SR X SH)
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Detailed explanation-1: -The formula for this variance is:(standard hours allowed for production – actual hours taken) × standard rate per direct labour hour. (standard hours allowed for production – actual hours taken) × standard rate per direct labour hour.
Detailed explanation-2: -The direct labor cost formula is a simple equation for determining direct labor cost. The pay rate multiplied by the time spent working on the project yields the direct labor cost, or Direct Labor Cost= Pay Rate * Project Time.
Detailed explanation-3: -Labor Price Variance Calculation Labor price variance equals the standard hourly rate you pay direct labor employees minus the actual hourly rate you pay them, times the actual hours they work during a certain period.
Detailed explanation-4: -Direct labour cost variance is the difference between the standard cost for actual production and the actual cost in production. There are two kinds of labour variances. Labour Rate Variance is the difference between the standard cost and the actual cost paid for the actual number of hours.