Houses4Rent
"We treat your investment as we treat our own"
marc@houses4rent.co.za www.houses4rent.co.za
083-3115551
Global Residential Property Investor / Specialized Letting Agent & Property Manager
Houses, it is a specific measurement of direct labour efficiency. You compare the standard hours that it should have taken to produce, to the actual hours it took, and multiply the difference in hours by the standard cost per direct labor hour.
If you start mixing standard and actual rates you corrupt the measurement.
speed_demon (09-Sep-14)
I am not with you. Efficiency is always a percentage.
>multiply the difference in hours by the standard cost per direct labor hour
That would be a Rand amount, not a percentage
Houses4Rent
"We treat your investment as we treat our own"
marc@houses4rent.co.za www.houses4rent.co.za
083-3115551
Global Residential Property Investor / Specialized Letting Agent & Property Manager
It's a classical cost accounting formula.
The variance account for any period will have a balance. The balance consists of mainly two components, one of which is efficiency; the other is mostly rate.
So, if you subtract the efficiency variance, you are left with a balance that points to a mainly rate problem, either too high or too low.
Here is a decent explanation
Seems all to be an accounting issue/function. In that case I stay out of it as I suck at it.
Houses4Rent
"We treat your investment as we treat our own"
marc@houses4rent.co.za www.houses4rent.co.za
083-3115551
Global Residential Property Investor / Specialized Letting Agent & Property Manager
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