Question

Standard labour hours for producing 1,000 units = 2,000 hours at ₹60/hour. Actual output = 900 units, actual hours worked = 1,950 hours, and actual wage rate = ₹65/hour. Calculate Labour Cost Variance (LC

  • V , Rate Variance, and Efficiency Variance.
A LCV = ₹5,000 A; Rate = ₹9,750 A; Efficiency = ₹4,750 F
B LCV = ₹18,750 A; Rate = ₹9,750 A; Efficiency = ₹9,000 A
C LCV = ₹11,250 F; Rate = ₹1,500 A; Efficiency = ₹9,750 A
D None
E Rate variance = ₹11,250 A; Efficiency = ₹1,500 F
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