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  • LCV 02

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    rikesh radhe
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    The document provides data to calculate labor cost, rate, and efficiency variances for a manufacturing company. In January 2021, 250 units were produced using 625 actual hours at a rate of Rs. 12.50 per hour, costing Rs. 7,813 total. The standard hours to produce 250 units is 500 hours at Rs. 10 per hour. The labor cost variance was Rs. 2,813 unfavorable, the labor rate variance was Rs. 1,563 unfavorable, and the labor efficiency variance was Rs. 1,250 unfavorable. The variances combined as expected.

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    LCV_02 (1)

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    The document provides data to calculate labor cost, rate, and efficiency variances for a manufacturing company. In January 2021, 250 units were produced using 625 actual hours at a rate of Rs. 12.50 per hour, costing Rs. 7,813 total. The standard hours to produce 250 units is 500 hours at Rs. 10 per hour. The labor cost variance was Rs. 2,813 unfavorable, the labor rate variance was Rs. 1,563 unfavorable, and the labor efficiency variance was Rs. 1,250 unfavorable. The variances combined as expected.

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    13 views2 pages

    LCV 02

    Uploaded by

    rikesh radhe
    The document provides data to calculate labor cost, rate, and efficiency variances for a manufacturing company. In January 2021, 250 units were produced using 625 actual hours at a rate of Rs. 12.50 per hour, costing Rs. 7,813 total. The standard hours to produce 250 units is 500 hours at Rs. 10 per hour. The labor cost variance was Rs. 2,813 unfavorable, the labor rate variance was Rs. 1,563 unfavorable, and the labor efficiency variance was Rs. 1,250 unfavorable. The variances combined as expected.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 2

    compute labour variances from the following data

    in a manufacturing company, 2 hrs are required to produce one un


    In the month of january, 2021, 250 units were produced by consum
    solution
    Standard hour for actual output = 250 units * 2 hrs = 500 hrs
    Standard Rate = Rs. 10 per hour
    Actual hours = 625 hrs
    Actual rate= Actual labour cost/ Actual hours=Rs. 7,813/ 25=Rs. 12.50.

    Labour Cost Variance (LCV)=(SH*SR) - (AH*AR)


    =(500hrs*Rs.10) - (625 hrs* Rs. 12.50)
    =Rs. 5000 - 7,813= (-Rs. 2,813) unfavourable

    Labour Rate Variance(LRV)= (SR - AR)*AH


    =(Rs. 10 - Rs. 12.50)*625hrs
    =(- Rs.1,563)------unfavourable

    Labour Efficiency Varaince (LEV)= (SH - AH)*SR


    =(500hrs - 625hrs) *Rs. 10
    =(-Rs. 1,250)------------unfavourable

    LCV=LRV+LEV
    (-Rs. 2,813)=(-Rs. 1563)+ (-Rs. 1,250)
    produce one unit of output @ Rs. 10 per hour.
    uced by consuming 625 labour hours and paying Rs. 7,813.

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