Accounting › Section U · Standard costs and variances › Topic U.3
Labor variances
Direct labour can cost more than standard because people were paid a different rate or worked a different number of hours. Separating the two tells managers whether to look at pay and scheduling or at productivity.
In this topic
- Rate or hours?
- The labour rate variance
- The labour efficiency variance
- Three columns again
- Worked example: Pellworth's March labour
- Who answers for each variance
- Worked example: a skill-mix trade-off
- Labour in modern settings
- Common mistakes to avoid
- Key takeaways
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