# Problem 1

M/s Anil Manufacturers have specified the following standard cost for a product:
Time 12 hours per unit
Cost 15 per hour

For the period ending 31st March, 1990, the actual performance was:
Production 1,500 units
Hours taken:

 Production 12,000 hours Idle Time 800 hours 12,800 hours
Payment made 1,97,120 (average p.h. 15.40).
Calculate Labour Variances.

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

# Problem 2

The standard output of product ‘MEX’ is 40 units per hour in manufacturing department of a company employing 150 workers. The standard wage rate per labour hour is 8
In a 48-hour week, the department produced 1,728 units of ‘MEX’ despite 5% of the time paid was lost due to an abnormal reason. The hourly wage rates actually paid were 8.40, 8 and 8.70 respectively to 40, 30 and 80 workers.
Compute relevant variances.

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

# Problem 3

Using the following information, calculate labour variances:
Gross direct wages = 36,000
Standard hours produced = 1,600
Standard rate per hour = 28
Actual hours paid = 1,200 hours, out of which hours not worked (abnormal idle time) are 50 hours

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

# Problem 4

In a factory section there are 140 workers and the average rate of wages per worker is 7.50 per hour. Standard working hours per week are 42 and the standard performance is 10 units per hour.
During the four weeks in February, wages paid for 80 workers were 8.00 per hour, for 25 workers 7.60 per hour, and for 35 workers 8.40 per hour.
This section did not work for 4 hours due to breakdown of machinery.
Work out the labour variances for the Section for 4 weeks.

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

# Problem 5

The following information relates to a manufacturing process of a company:
 Number of employees Weekly hours worked Standard wage rate Standard output 250 42 5 250 rupees per hour units per hour
During a particular week, four employees were paid at 4.50 per hour and two employees at 5.50 per hour, the rest employees were paid at standard rates. Idle time is one hour per employee. Actual output was 10,250 units. Calculate Labour Variances.

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

# Problem 6

Given for a factory;
 Normal number of workers in the department Number of hours paid for in a week Standard rate for wages per hour Standard output of the department per hour       taking into account normal idle time 75 42 6 25 units
In a week, it was ascertained that 1,000 units were produced despite 20% idle time due to power failure and actual rate of wages was 6.40 per hour.
You are required:
 (i) To calculate the wages variance, and (ii) To show its division into: wages rate variance, abnormal idle time variance and labour efficiency variance.

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

# Problem 7

 Standard output Standard time per unit Standard rate per hour Actual output Total actual time taken Actual rate per hour The ideal time 250 units 4 hrs. 13 240 units 1,150 hours 15 25 hrs.
Calculate all possible labour/labor variances

Solution

# Problem 8

From the following information, calculate labour/labor variances
 Actual output No.of employees engaged Standard daily output per employee Standard wage per employee Total No. of days worked Idle time included in above Actual wage per employee 22,00,000 units 600 125 units 10 per day 35 days 1 day 75 per day

Solution

# Practice Problems

Author : The Edifier