Exhibit 17.3 presents the direct manufacturing labour price and efficiency variances for each employee category and in total. The total price variance is unfavorable ($1180 U) because of the higher wage rates paid to Grade 1 and Grade 2 labour. Managers would want to understand why the wage rates were higher — for example, did the higher rate result from a general shortage of Grade 2 labour or from factors specific to Aliya? The total efficiency variance is unfavorable ($420 U, primarily because of the greater
number of hours worked byGrade 3 labour. The budgeted costs of these hours were only paria1ly offset by the fewer hours worked by Grade 1 and Grade 2 labour and the fewer total hours worked. Aliya’s managers would want to
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