Brooke,
Labor cost variances happen a two different ways:
Labor $ rate variances: Resource Group or Resource labor rates are used as estimates. Employee labor rates are used as actuals. If these two rates are not aligned this will create a labor cost variance. It is easy to forget to add the labor rate to the employee when new ones are setup.
Labor time variances: The method operation time per piece versus the actual job operation time entered will also cause a variance. One way to eliminate this variance to change the method from time and quantity to quantity only and then run the backflush labor process. This will put the labor time into the job for the pieces ran at the standard time per piece. You loose the actual versus standard costing, but eliminate this type of variance.
If it has worked for 20+ years I would suggest trying figure out what has changed to cause the current issues.
Hope this helps.
Brad Boes
bradboes@boosterpconsulting.com
231-845-1090
