Page 136 - P1 Integrated Workbook STUDENT 2018

Chapter 8

2.2 Calculations

Mix variance

Labour type Standard Actual Difference @ Standard Variance
mix mix rate*

Skilled X X X X X

Unskilled X X X X X

X X X

* a weighted average method can also be used and requires the calculation of
the weighted average standard rate. When using this method, the mix variance
for both types of labour will either be favourable or adverse.

Yield variance

Standard yield of actual hours X units

Actual yield (output) Y units
––––––––

X – Y units
@ Standard cost per hour of output $

––––––––
Variance (X – Y) × $

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