Hi all! How does the system handle variances in labour rates? We have union – when there is a lay off, usually the packers (least seniority) get laid off first and the more expensive line operators doing packing functions. How would the system accommodate such rate variances? Thanks Tatiana
Hi Tatiana The unit cost of labour will depend upon how you have defined it - do you have machine centres set up as people? If not the unit cost of labour for a machine centre is based upon what? Of course if you alter the unit cost in these ways you will see no variance! Record the cost on the appropriate journal where the rate has increased and the postings will go into the variance accounts of the inventory posting groups.