Match the following. List-I List-II a. Labour cost variance 1. Actual hours paid (Standard rate – Actual rate) b. Labour rate variance 2. Standard cost – Actual cost c. Efficiency variance 3. Idle hours × Standard rate per hour d. Idle time variance 4. Standard rate (Standard hours – Actual hours worked)

The correct answer is: A. a-4, b-3, c-2, d-1

• Labour cost variance = Standard cost – Actual cost
• Labour rate variance = Actual hours paid (Standard rate – Actual rate)
• Efficiency variance = Standard rate (Standard hours – Actual hours worked)
• Idle time variance = Idle hours × Standard rate per hour

Here is a brief explanation of each variance:

• Labour cost variance: This variance measures the difference between the actual cost of labour and the standard cost of labour. It can be caused by changes in the actual wage rate, the actual hours worked, or the standard hours allowed.
• Labour rate variance: This variance measures the difference between the actual wage rate and the standard wage rate. It can be caused by changes in the market wage rate, changes in the mix of employees, or errors in the payroll.
• Efficiency variance: This variance measures the difference between the standard hours allowed and the actual hours worked. It can be caused by changes in the productivity of the workforce, changes in the methods of production, or errors in the timekeeping system.
• Idle time variance: This variance measures the difference between the actual hours worked and the standard hours allowed, multiplied by the standard wage rate. It can be caused by machine breakdowns, absenteeism, or poor scheduling.