The-definition.com

Definition

Direct labor variance or total labor variance

The direct labor variance or total labor variance is the difference between the actual hours times the actual rate and the standard hours times the standard rate for labor.

The total labor variance is computed from the following formula.

(Actual Hours * Actual Rate) – (Standard hours * Standard Rate) = Total Labor Variance (LTV)

Share it:  Cite

More from this Section

  • Debit
    Debit is an entry that records an increase in assets, a decrease in liabilities, or a ...
  • Receivables
    Receivables refer to amounts due from individuals and other companies. Receivables are ...
  • Errors of principles
    Errors of principles refers such errors arise when the entries are not recorded according ...
  • Cost Drivers
    A cost driver refers to any factor or activity that has a direct cause-effect relationship ...
  • Annual report
    Annual report is the document in which businesses summarize their financial condition ...