Page 112 - P1 Integrated Workbook STUDENT 2018
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Chapter 7
Labour variances
4.1 Calculations
SHSR
Efficiency variance
AHSR Total variance
Rate variance
AHAR
H = hours
R = rate
If there is idle time, the rate variance is based on the hours actually paid whilst the
efficiency variance is based on the hours actually worked.
Idle time variance:
Actual hours worked × standard rate per hour X
Actual hours paid × standard rate per hour Y
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Idle time variance this is always adverse X – Y
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