MA - Accounting for Labour

Who is responsible for a labor efficiency variance?

• The Purchasing Agent.

• The Production Manager

• The Production & Maintenance Managers

• Supervisor

Labour efficiency variance is favourable when actual labour hours are less than _____________.

• standard labour hours

• standard labour rate

• actual labour rate

• labour cost

Labour Rate standard is decided by _________ department.

• human resource

• sales

• purchases

• production

A favorable labor rate variance indicates that

• actual hours exceed standard hours.

• standard hours exceed actual hours.

• the actual rate exceeds the standard rate.

• the standard rate exceeds the actual rate.

An unfavorable labor efficiency variance indicates that the actual number of direct labor hours worked was greater than the number of direct labor hours that should have been worked for the output attained.

• True

• False

Which TWO of the following would be classed as indirect labour?

1. Assembly workers in a company manufacturing televisions

2. A stores assistant in a factory store

3. Factory cleaning staff

4. Plasterers in a construction company

5. A consultant in a firm of management consultants

• 1 & 2

• 3 & 4

• 2 & 3

• 4 & 5

A production worker is paid a salary of $650 per month, plus an extra 5 cents for each unit produced during the month.

How is this type of labour cost best described?

• A variable cost

• A fixed cost

• A step cost

• A semi-variable cost

Budgeted and actual production data for the year that has just ended are as follows.

Total machine hours worked in the period amounted to 29,000 hours.

What was the capacity ratio in the year, as a percentage to one decimal place?

• 10.4%

• 104.4%

• 107.4%

• 100.4%

Budgeted and actual production data for the year that has just ended are as follows.

Total machine hours worked in the period amounted to 29,000 hours.

What was the efficiency ratio in the year, as a percentage to one decimal place?

• 96.2%

• 90.2%

• 96.2%

• 99.2%

What does the labour cost graph below depict?

• A piece rate scheme with a minimum guaranteed wage

• A straight piece rate scheme

• A straight time rate scheme

• A differential piece rate scheme