CAF-5 · Chapter 18 · Question 13 of 20
(Labour Variances & High Day-Rate) Std labour rate Rs. 100/hr, 2 hrs per unit. New rate Rs. 120/hr. In first month, 5,000 units produced using 9,000 actual hours. What are the Labour Efficiency and Rate Variances?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Efficiency: 100,000 Fav / Rate: 180,000 Adv
Explanation
Efficiency = (10,000 Std hrs - 9,000 Act hrs) * 100 = 100,000 Fav. Rate = (100 Std - 120 Act) * 9,000 = 180,000 Adv.
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