FAVOURABLE VARIANCES

feautures of job costing

Idle Time Variance – meaning and formula.

Idle Time Variance – This variance is the standard cost of actual time paid to workers for which they have not worked due to abnormal reasons. The Reasons for idle time may be power failure, defect in machinery, and non supply of materials, etc. Idle time variance should be segregated from the labour efficiency variance otherwise it will show inefficiency … Read the rest

Labour Rate of Pay or Wage Rate Variance – meaning and formula.

Labour Rate of Pay or Wage Rate Variance – It is that part of labour cost variance which arises due to a change in specified wage rate. Labour rate variance arises due to

  • change in basic wage rate or piece-work rate,
  • employing persons of different grades then specified,
  • payment of more overtime than fixed earlier, (iv) new workers being paid
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