Labour Rent Variance:

The labour rent variance refers to the difference between the actual labour cost incurred and the standard labour cost for producing a given amount of output. It helps in evaluating the efficiency of the labour cost management.

To calculate the labour rent variance, we need to know the standard labour cost, actual labour cost, and the number of units produced.

Given:
- Standard labour cost per unit: 10 hours at Rs40 per hour
- Actual labour hour rate: Rs38 per hour
- Total output: 5 units

Calculating Standard Labour Cost:

Standard labour cost per unit = Standard labour hours per unit × Standard labour rate per hour

Standard labour cost per unit = 10 hours × Rs40 per hour = Rs400

Calculating Actual Labour Cost:

Actual labour cost = Actual labour hour rate × Actual labour hours

As the actual labour hour rate is given as Rs38 per hour and the working days are 8 hours per day, we can calculate the actual labour hours as follows:

Actual labour hours = Total working days × Working hours per day
= 5 × 8
= 40 hours

Actual labour cost = Rs38 per hour × 40 hours = Rs1,520

Calculating Labour Rent Variance:

Labour rent variance = Actual labour cost - Standard labour cost

Labour rent variance = Rs1,520 - Rs400 = Rs1,120

The positive value of the labour rent variance indicates that the actual labour cost is higher than the standard labour cost. In this case, the labour rent variance is Rs1,120, which implies that the actual labour cost exceeds the expected cost by Rs1,120.

Labour Efficiency Variance:

The labour efficiency variance measures the difference between the actual labour hours and the standard labour hours required to produce a given amount of output. It helps in evaluating the efficiency of the workforce.

To calculate the labour efficiency variance, we need to know the standard labour hours and the actual labour hours.

Given:
- Standard labour hours per unit: 10 hours
- Total output: 5 units

Calculating Standard Labour Hours:

Standard labour hours = Standard labour hours per unit × Total output

Standard labour hours = 10 hours × 5 units = 50 hours

Calculating Labour Efficiency Variance:

Labour efficiency variance = Standard labour hours - Actual labour hours

Labour efficiency variance = 50 hours - 40 hours = 10 hours

The positive value of the labour efficiency variance indicates that the actual labour hours are lower than the standard labour hours. In this case, the labour efficiency variance is 10 hours, which implies that the workforce is more efficient in completing the production process compared to the expected standard.