# Problem 1

Data relating to a job are as thus:
 Standard rate of wages per hour Standard hours Actual rate of wages per hour         Actual hours 20 2,500 21 2,400
You are required to calculate all the possible labour/labor variances

Solution
[LCV = − 400; LRPV =− 2,400; LEV/LUV = + 2,000;LITV = – LMV/LGCV =0;LYV/LSUV =+ 2,000;]

# Problem 2

The following information is obtained from a Standard Cost Card: Labour Rate 90 Paise per hour
Hours – 4 hours per unit

Actual Production data are:-

Units produced 280
Labour Rate 1.15 per hour
Hours worked 1,200
Calculate Labour Cost Variance and analyse it.

Solution
[LCV = − 372; LRPV = − 300; LEV/LUV = − 72; LITV = – LMV/LGCV = 0 ; LYV/LSUV = − 72;]

# Problem 3

The standard time and rate for unit component GEMMY are given below:-
 Standard hours Standard rate The actual data and related information are as under. Actual production Actual hours Actual rate 15 5 per hour 1,000 units 15,300 hrs. 5.40 per hour.
Calculate Labour Variances.

Solution
[LCV = − 7,620; LRPV = − 6,120; LEV/LUV = − 1,500; LITV = – LMV/LGCV = 0 ;LYV/LSUV = − 1,500;]

# Problem 4

 Standard output Standard time per unit Standard rate per hour Actual output Total actual time taken Actual rate per hour 200 units 3 hrs. 4 180 units 580 hours 3.80
You are required to calculate all possible labour/labor variances

Solution
[LCV = − 44; LRPV = + 116; LEV/LUV = − 160; LITV = – LMV/LGCV = 0 ;LYV/LSUV = − 160;]

# Problem 5

The direct labour strength of a section of an engineering factory is 120 workers paid at the rate 8.00 per day of 8 hours each. The normal production is 1,250 pieces per week of 48 hours. During a particular week an order for 1,500 pieces was completed expending in all 7,150 hours made up of 6,000 hours at normal wages and 1,150 hours at overtime wages at double rate. The total wages come to 9,000 .Calculate the average labour cost per piece during the week and analyse the labour cost variance for the week.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0 ;LYV/LSUV = ;]

# Problem 6

Standard hours for manufacturing two products YEM and YEN are 15 hours per unit and 25 hours per unit respectively. Both products require identical type of labour and standard wage rate per hour is 8. In a period, 8,000 units of YEM and 14,000 units of YEN were manufactured. The total labour hours actually worked were 4,75,875 and the actual wage bill come to 36,35,100. This included 18,000 hours paid for @ 8 per hour and 12,500 hours paid for @ 8.50 per hour, the balance having been paid at 7.60 per hour. You are required to calculate Labour Variances.

Solution
[LCV = ; LRPV = ; LEV/LUV = ; LITV = – LMV/LGCV = 0;LYV/LSUV = ;]

# Problem 7

From the following information calculate all possible labour/labor variances:
Dept. X
Dept. Y
Gross wages paid to direct workers 49,980 61,920
Standard hours produced 9,000 9,000
Standard rate per hour 13 18
Actual hours worked 9,800 Hrs. 8,600 Hrs.

Solution
X:[LCV = + 67,020; LRPV = + 77,420; LEV/LUV = − 10,400; LITV = – LMV/LGCV = 0 and LYV/LSUV = − 10,400;]
Y:[LCV = + 1,00,880; LRPV = + 92,880; LEV/LUV = + 7,200; LITV = – LMV/LGCV = 0 ; LYV/LSUV = + 7,200;]

# Problem 8

The following information is gathered from the labour records of Binamul & Co. Payroll allocation for direct labour 1,31,600

Time card analysis shows that 9,400 hours were worked on productions lines.

Production reports for the period showed that 4,500 units have been completed, each having standard labour time of 2 hours and a standard labour rate of 15 per hour.
Calculate the labour variances.

Solution
[LCV = + 3,400; LRPV = + 9,400; LEV/LUV = − 6,000; LITV = – LMV/LGCV = 0 ;LYV/LSUV = − 6,000;]

# Practice problems

Author : The Edifier