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The Pure Rate Variance

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dc.contributor.author Bradshaw, John
dc.contributor.author Keef, Stephen
dc.contributor.author Roush, Melvin
dc.date.accessioned 2007-11-21T19:28:41Z
dc.date.accessioned 2022-07-05T02:30:53Z
dc.date.available 2007-11-21T19:28:41Z
dc.date.available 2022-07-05T02:30:53Z
dc.date.copyright 2005
dc.date.issued 2005
dc.identifier.uri https://ir.wgtn.ac.nz/handle/123456789/18631
dc.description.abstract The direct material cost variance can be subdivided into a price variance, a quantity variance and a price-quantity interaction variance. The price-quantity interaction variance is rarely mentioned in the literature because the traditional price variance does not acknowledge an interaction variance. For a number of pragmatic reasons, this approach may be justified for the direct material price variance. The direct labor cost variance is conceptually similar to the direct material cost variance. Accordingly, the traditional direct labor rate variance also includes a rate-efficiency interaction variance. However, the justifications for incorporating the interaction variance into the direct material price variance do not apply to the direct labor rate variance. This paper explores the possibility of separating the rate-efficiency interaction variance from the direct labor rate variance. This approach may be more aligned with the concept of responsibility accounting than the traditional method of calculating the direct labor rate variance. Thus, it may provide more reliable information feedback for decision-making purposes. en_NZ
dc.format pdf en_NZ
dc.language.iso en_NZ
dc.publisher Te Herenga Waka—Victoria University of Wellington en_NZ
dc.relation.ispartofseries No. 27 en_NZ
dc.relation.ispartofseries Working Paper en_NZ
dc.subject Rate comparison en_NZ
dc.subject Performance measurement en_NZ
dc.subject Production costs en_NZ
dc.subject Labour cost en_NZ
dc.title The Pure Rate Variance en_NZ
dc.type Text en_NZ
vuwschema.contributor.unit Centre for Accounting, Governance and Taxation Research en_NZ
vuwschema.contributor.unit School of Accounting and Commercial Law en_NZ
vuwschema.subject.anzsrcfor 150199 Accounting, Auditing and Accountability not elsewhere classified en_NZ
vuwschema.subject.marsden 350100 Accounting, Auditing and Accountability en_NZ
vuwschema.type.vuw Working or Occasional Paper en_NZ
vuwschema.subject.anzsrcforV2 350199 Accounting, auditing and accountability not elsewhere classified en_NZ

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