Question

1.2 REQUIRED: Use the information provided below to calculate the following:

1.2.1 Idle time variance (3)

1.2.2 Labour mix variance (7)

1.2.3 Labour yield variance (3)

Indicate whether each variance is favourable or unfavourable.

INFORMATION:

Standard labour costs for Electro Manufacturers to manufacture 2 000 units:

400 hours at R70 per hour

200 hours at R35 per hour

Actual labour costs incurred to produce 1 900 units:

290 hours at R R65 per hour

170 hours at R32 per hour

Idle time represents 10% of the recorded labour hours

Answer 1