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Direct Labor Cost Variance

2011/1/12 11:41:00 51

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The difference between the actual direct labor cost and the standard direct labor cost for the actual output or quantity.

The difference of direct labor cost can be divided into two types: wage rate difference and efficiency difference.

(1) wage rate variance

The difference between direct labor price and actual labor cost is the actual labor cost.

wages

The difference between the labor cost calculated by the rate.

The real wage rate is the ratio of the total real wage to the actual total working hours. The standard wage rate refers to the standard wage.

Total

Ratio to standard total working hours.

The reasons for the difference in the rate of direct labor wage include the upgrading and downgrading of direct production workers, the lack of effectiveness of the reward system, wage adjustment, overtime or temporary employment and attendance changes. The reasons are complex and difficult to control.

Generally speaking, it should belong to the management of personnel and labor departments. The specific reasons for the differences may relate to the production department or other departments.

(2) efficiency difference

The difference between direct labor and manual labor is the difference between labor cost and standard labor cost calculated according to standard wage rate.

cause

direct

The reasons for the difference in manual efficiency include bad working environment, lack of workers' experience, poor working mood, too many new workers, improper selection of machines or tools, more equipment failures, improper operation plan, too little output, and no advantage of batch saving. It is the responsibility of the production department, but it is not absolute. For example, poor quality of materials will also affect the efficiency of production.

For the difference of direct labor efficiency, if there is a mixed use of different levels of workers, it can be further decomposed, and the structural differences and efficiency differences can be calculated. It reflects the change of the proportion of work hours completed by different ranks of workers in a certain amount of total working hours and the change of work efficiency. The formula is as follows:

Direct artificial structure difference = sigma (actual working hours * standard wage rate) - Sigma (actual working hours) * predetermined average wage rate

Direct labor efficiency difference = sigma (actual working hours) * predetermined average wage rate - Sigma (standard working hours * standard wage rate).