Page 319 - SBL Integrated Workbook STUDENT 2018
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Financial decision making
Key roles
Labour Changes to labour motivation.
efficiency
Changes to the labour mix resulting in using labour that is more or
less experienced (and so more or less efficient) than the 'standard'.
Improved working methods.
Industrial action by the work force.
Poor supervision.
A 'learning effect' amongst the work force.
Variable Expenditure variances are often caused by changes in machine
overhead running costs (for example, if electricity rates have changed).
expenditure
Efficiency variances have similar causes to those for a direct labour
efficiency variance.
Fixed Expenditure variances are caused by spending in excess of the
overhead budget. A more detailed analysis would be needed.
expenditure
Volume, capacity and efficiency variances have similar causes to
those for a sales volume variance
Illustrations and further practice
Now try TYU question 6.
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