# Calculating Labour/Labor Variances - Other methods

# Formulae with Numerical Codes for Values

If too many modes would distort your understanding, it is better advised to avoid reading this. The only reason it is being given is to make you aware of all the possibilities in the learning process.

1 | ST ×
| SC(AO) | Standard Cost for Actual Output | ||

2 | AT × AR | AC | Actual Cost of Labour/Labor | ||

3 | AT × SR | SC(AT) | Standard Cost of Actual Time | ||

4 | PT × SR | SC(PT) | Standard Cost of Productive Time | ||

5 | IT × SR | SC(IT) | Standard Cost of Idle Time | ||

6 | ST ×
| SC(AI) | Standard Cost for Actual Input |

Labour/Labor | |||

LCV LRPV LUV/LGEV LEV LITV LMV/GCV LYV/LSEV | = = = = = = = | 1 − 23 − 2 1 − 3 1 − 4 − 5 6 − 4 1 − 6 | Cost Variance Rate of Pay Variance Usage/Gross-Efficiency Variance Efficiency Variance Idle Time Variance Mix/Gang-Composition Variance Yield/Sub-Efficiency Variance |

## The pit fall

We have to remember the variances based on the order number attributed to the calculated values.The value calculations are the same as the values in the working table we prepare. Thus it would be fool proof if we are able to remember the relations in the formula as abbreviations representing values rather than the number assigned for values.

Labour/Labor | |||

LCV LRPV LUV/LGEV LEV LITV LMV/GCV LYV/LSEV | = = = = = = = | 1 − 23 − 2 1 − 3 1 − 4 − 5 6 − 4 1 − 6 | ~ SC(AO) − AC ~ SC(AT) − AC ~ SC(AO) − SC(AT) ~ SC(AO) − SC(PT) ~ − SC(IT) ~ SC(AI) − SC(AT) ~ SC(AO) − SC(AI) |

If we are to find out the variances for individual materials, then multiple calculations of this sort have to be made once for each labour/labor type. The working table format would be more convenient to derive all the information needed.

If we understand the logic behind the formulae, we don't even need to mug up the formulae. We can recollect or derive them on the fly. Try working out all the problems with the same set of formulae.