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Labour Mix Variance Calculator

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Important Formulas of Cost Accounting

✖Standard Rate refers to the amount paid per hour for work, often determined by industry standards or local laws.ⓘ Standard Rate [SR]			+10% -10%
✖Reversed Standard Rate is the minimum wage or adjustments to industry standards.ⓘ Reversed Standard Rate [RSR]			+10% -10%
✖Actual Time refers to the time taken to produce an item on a production line versus the planned production time.ⓘ Actual Time [AT]			+10% -10%

✖Labour Mix Variance is a concept used in cost accounting to assess the difference between the actual and budgeted labor mix.ⓘ Labour Mix Variance [LMV]

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Labour Mix Variance Solution

STEP 0: Pre-Calculation Summary

Formula Used

Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time)
LMV = SR*(RSR-AT)
This formula uses 4 Variables

Variables Used

Labour Mix Variance - Labour Mix Variance is a concept used in cost accounting to assess the difference between the actual and budgeted labor mix.
Standard Rate - Standard Rate refers to the amount paid per hour for work, often determined by industry standards or local laws.
Reversed Standard Rate - Reversed Standard Rate is the minimum wage or adjustments to industry standards.
Actual Time - Actual Time refers to the time taken to produce an item on a production line versus the planned production time.

STEP 1: Convert Input(s) to Base Unit

Standard Rate: 140 --> No Conversion Required
Reversed Standard Rate: 115 --> No Conversion Required
Actual Time: 4 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

LMV = SR*(RSR-AT) --> 140*(115-4)

Evaluating ... ...

LMV = 15540

STEP 3: Convert Result to Output's Unit

15540 --> No Conversion Required

FINAL ANSWER

15540 <-- Labour Mix Variance

(Calculation completed in 00.005 seconds)

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Created by Aashna

IGNOU (IGNOU), India

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Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

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< Cost Accounting Calculators

Material Cost Variance

LaTeX Go Material Cost Variance = (Standard Quality for Actual Output*Standard Price)-(Actual Quantity*Actual Price)

Revised Standard Quantity

LaTeX Go Revised Standard Quantity = (Standard Quantity of each Material/Total Standard Quantity)*Total Actual Quantity

Material Price Variance

LaTeX Go Material Price Variance = Actual Quantity*(Standard Price-Actual Price)

Material Quantity

LaTeX Go Material Quantity = Standard Price*(Standard Quantity-Actual Quantity)

Labour Mix Variance Formula

LaTeX Go

Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time)
LMV = SR*(RSR-AT)

What is Labour Mix Variance ?

Labour Mix Variance measures the impact of changes in the labour mix on labour costs. It is the portion of direct labor efficiency variance that is attributable to the difference between the standard and actual group composition of employees. It defines the actual proportion or composition of different types of labor (e.g., skilled workers, semi-skilled workers, unskilled workers) used in a production process during a specific period. It represents the planned or expected proportion of various types of labour in the production process, as defined in the budget or standard cost system. Labour mix variance analysis can provide insights into efficiency, resource allocation, and the effectiveness of workforce planning. Management can use this information to make adjustments to labour allocation, staffing levels, or training programs to optimize performance and control costs.

How to Calculate Labour Mix Variance?

Labour Mix Variance calculator uses Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time) to calculate the Labour Mix Variance, Labour Mix Variance measures the difference between the actual labour mix and the budgeted labour mix. Labour Mix Variance is denoted by LMV symbol.

How to calculate Labour Mix Variance using this online calculator? To use this online calculator for Labour Mix Variance, enter Standard Rate (SR), Reversed Standard Rate (RSR) & Actual Time (AT) and hit the calculate button. Here is how the Labour Mix Variance calculation can be explained with given input values -> 15540 = 140*(115-4).

FAQ

What is Labour Mix Variance?

Labour Mix Variance measures the difference between the actual labour mix and the budgeted labour mix and is represented as LMV = SR*(RSR-AT) or Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time). Standard Rate refers to the amount paid per hour for work, often determined by industry standards or local laws, Reversed Standard Rate is the minimum wage or adjustments to industry standards & Actual Time refers to the time taken to produce an item on a production line versus the planned production time.

How to calculate Labour Mix Variance?

Labour Mix Variance measures the difference between the actual labour mix and the budgeted labour mix is calculated using Labour Mix Variance = Standard Rate*(Reversed Standard Rate-Actual Time). To calculate Labour Mix Variance, you need Standard Rate (SR), Reversed Standard Rate (RSR) & Actual Time (AT). With our tool, you need to enter the respective value for Standard Rate, Reversed Standard Rate & Actual Time and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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