RETURN TO GLOSSARY INDEX

Labor efficiency variance

The difference between time spent in producing the actual output and the time that should have been spent multiplied by the standard rate

Labor rate variance

The difference between the rate per hour paid to labor and the standard rate set multiplied by the actual hours worked

Last in first out

The latest materials purchased are used or issued first. The price paid to purchase the latest materials is used to value or price the issue.

Ledger

A book in which accounts are kept

Limiting factor

The factor which limits the activities of a business. Also referred to as principal factor, governing factor, key factor or scarce resource.