Page 137 - P1 Integrated Workbook STUDENT 2018
P. 137
Advanced variance analysis
Example 2
An audit firm plans a job with the following staff requirement:
Staff members Time allowed Cost per hour Total
Audit manager 5 hours $30 $150
Supervisor 20 hours $15 $300
Junior trainee 35 hours $10 $350
Total 60 hours $800
The actual hours worked on the job were:
Audit manager 6 hours
Supervisor 15 hours
Junior trainee 45 hours
Total 66 hours
Calculate the labour mix and yield variances using both the individual
and weighted average methods.
Solution
Labour yield variance
This will be the same under both methods.
The standard yield = 66 hours should yield 1.1 jobs
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