Labor Variance
Finance
Labor Variance
Difference between actual labor cost or hours and the standard or budgeted labor requirement.
Examples
- 01The labor variance on the assembly line is 120 hours over standard this month, mainly because two new employees are still in training.
- 02Supervisors review the labor variance weekly by line and see that most extra hours come from waiting for material.
- 03After a milk run is introduced and waiting time disappears, the labor variance drops close to zero within six weeks.