01. 
A gang of workers usually consists of 50 men, 35 women and 15 boys in a factory. The are paid at standard hourly rates of Rs. 8, Rs. 6 and Rs. 5 respectively. In a normal working week of 40 hours the gang is expected to produce 1,500 units of output.
In a certain week, the gang consisted of 55 men, 40 women and 25 boys. Actual wages were paid at the rates of Rs. 8, Rs. 6.50 and Rs. 6 respectively. Two hours per week were lost due to abnormal idle time and 1,350 units of output were produced.
Calculate various labour/labor variances
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0; LYV/LSUV = ;]

02. 
Following information is given regarding standard composition and standard rates of a gang of workers:
Standard composition 
Standard Hourly Rate 
40 Men 
Rs. 6.00 
25 Women 
4.00 
25 Boys 
3.00 
According to given specifications, a week consists of 40 hours and standard output for a week is 1,000 units
In a particular week, gang consisted of 33 men, 34 women and 23 boys and actual wages were paid as follows:
Men @ Rs. 6.50 per hour
Women @ Rs. 4
Boys @ Rs. 2.75 per hour
Two hours were lost in the week due to abnormal idle time. Actual production was 960 units in the week.
Find out all possible labour/labor variances
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ;LYV/LSUV = ;]

03. 
The following was the composition of a gang of workers in a factory during a particular month, in one of the production departments. The standard composition of workers and wge rate per hour were as below:
Skilled  :  Two workers at a standard rate of Rs.20 per hour each. 
Semiskilled:  :  Four workers at a standard rate of Rs.12 per hour each. 
Unskilled:  :  Four workers at a standard rate of Rs.8 per hour each. 
The standard output of the gang was four units per hour of the product.
During the month in question, however, the actual composition of the gang and hourly rates paid were as under:
Nature of workers 

No. of workers 

Wage rate paid per worker per hour engaged 
Skilled 

2 

Rs. 20 
Semiskilled 

3 

Rs. 14 
Unskilled 

5 

Rs. 10 
The gang was engaged for 200 hours during the month, which included 12 hours when no production was possible, due to machine breakdown, 810 units of the product were recorded as output of the gang during the month
You are required
(a) to compute the standard unit labour cost of the product:
(b) to compute the total variance in labour cost during the month; and
(c) analyse the variances in (b) above into subvariances and reconcile.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ;LYV/LSUV = ;]

04. 
Munjal Sons produces one article named TRY in their factory. They employ male as well as female labourers/laborers. The Standard for production of TRY is as follows:

Rs. 
Male 
8,000 hrs 
@ Rs. 5 p.h. 
= 
40,000 
Female 
8,000 hrs 
@ Rs. 4 p.h. 
= 
32,000 

16,000 hrs 

= 
72,000 
The actual amount spent on account of labour was as under:

Rs. 
Male 
9,400 hrs 
@ 60 paise p.h. 
= 
5,580 
Female 
7,000 hrs 
@ 35 paise p.h. 
= 
2,450 

16,300 hrs 

= 
8,030 
Due to machine breakdown both the labourers, i.e., male and female were idle for 50 hours.
Calculate Labour/Labor Variances
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ;LYV/LSUV = ;]

05. 
Calcualte the labour variances from the following information:
Standard Wages:
Grade X : 90 labourers at Rs. 2 per hour.
Grade Y : 60 labourers at Rs. 3 per hour.
Actual Wages :
Grade X : 80 labourers at Rs. 2.50 per hour.
Grade Y : 70 labourers at Rs. 2.00 per hour.
Budgeted Hours 1,000 : Actual Hours 900
Budgeted Gross Production 5,000 units: Standard Loss 20% ; actual loss 900 units.
Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = –
LMV/LGCV = 0 ;LYV/LSUV = ;]


cost,material,labour,fixed,variable,overhead,sales,profit,variance,reconciliation,standard,actual,formula interpretation,accounting.

cost,material,labour,fixed,variable,overhead,sales,profit,variance,reconciliation,standard,actual,formula interpretation,accounting.


