Discuss whether learning curve can help the company in assessing and controlling the labour variance.

Learning curve is a geometrical progression, which reveals that there is steadily decreasing cost for the accomplishment of a given repetitive operation, as the identical operation is increasingly repeated. The amount of decrease will be less and less with each successive unit produced. As more units are produced, people involved in production become more efficient than before, each additional unit takes less time to produce. The amount of improvement are experience gained is reflected in a decrease man-hours or cost. Where learning takes place with a regular pattern it is important to take account of the reduction in labour hours and cost per unit. Automated manufacturing is unlikely to have much variation or to display a regular learning curve. In less- automated precesses, however, where learning curves do occur, it is important to take the resulting decline in labour hours and costs into account in settling standards, determining prices, planning production, or setting up work schedules. With the help of the learning curve theory the standard time of any batch or unit can be computed then compare the actual data with the standard and compute the variances.