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Labour Efficiency Variance Formula

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Labour Efficiency Variance is the difference between the actual time worked and the total hours that should have been worked. Check FAQs

LV = SR \cdot (ST - AT) \cdot V

LV - Labour Efficiency Variance?SR - Standard Rate?ST - Standard Time?AT - Actual Time?V - Variance?

Labour Efficiency Variance Example

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Here is how the Labour Efficiency Variance equation looks like with Values.

Here is how the Labour Efficiency Variance equation looks like with Units.

Here is how the Labour Efficiency Variance equation looks like.

2100 = 140 \cdot (5 - 4) \cdot 15

2100 = 140 \cdot (5 - 4) \cdot 15

2100 = 140 \cdot (5 - 4) \cdot 15

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Labour Efficiency Variance Solution

Follow our step by step solution on how to calculate Labour Efficiency Variance?

FIRST Step Consider the formula

LV = SR \cdot (ST - AT) \cdot V

Next Step Substitute values of Variables

∴

LV = 140 \cdot (5 - 4) \cdot 15

Next Step Prepare to Evaluate

∴

LV = 140 \cdot (5 - 4) \cdot 15

LAST Step Evaluate

∴

LV = 2100

Labour Efficiency Variance Formula Elements

Variables

Labour Efficiency Variance

Labour Efficiency Variance is the difference between the actual time worked and the total hours that should have been worked.

Symbol: LV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Labour Efficiency Variance

Standard Rate

Standard Rate refers to the amount paid per hour for work, often determined by industry standards or local laws.

Symbol: SR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Standard Rate

Standard Time

Standard Time refers to the established time used within a particular country. It's the time that's officially recognized and adhered to for various purposes.

Symbol: ST

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Standard Time

Actual Time

Actual Time refers to the time taken to produce an item on a production line versus the planned production time.

Symbol: AT

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Actual Time

Variance

Variance refers to the difference or deviation between an actual outcome or result and an expected or planned outcome.

Symbol: V

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Variance

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How to Evaluate Labour Efficiency Variance?

Labour Efficiency Variance evaluator uses Labour Efficiency Variance = Standard Rate*(Standard Time-Actual Time)*Variance to evaluate the Labour Efficiency Variance, Labour Efficiency Variance is a concept used in managerial accounting and cost accounting to assess the difference between the actual hours of labor used in production and the standard or expected hours of labor. Labour Efficiency Variance is denoted by LV symbol.

How to evaluate Labour Efficiency Variance using this online evaluator? To use this online evaluator for Labour Efficiency Variance, enter Standard Rate (SR), Standard Time (ST), Actual Time (AT) & Variance (V) and hit the calculate button.

FAQs on Labour Efficiency Variance

What is the formula to find Labour Efficiency Variance?

The formula of Labour Efficiency Variance is expressed as Labour Efficiency Variance = Standard Rate*(Standard Time-Actual Time)*Variance. Here is an example- 2100 = 140*(5-4)*15.

How to calculate Labour Efficiency Variance?

With Standard Rate (SR), Standard Time (ST), Actual Time (AT) & Variance (V) we can find Labour Efficiency Variance using the formula - Labour Efficiency Variance = Standard Rate*(Standard Time-Actual Time)*Variance.

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Labour Efficiency Variance Formula

Labour Efficiency Variance Example

Labour Efficiency Variance Solution

Labour Efficiency Variance Formula Elements

Other formulas in Cost Accounting category

How to Evaluate Labour Efficiency Variance?

FAQs on Labour Efficiency Variance

Variable Name