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for A,
direct labours/unit = 8
units= 1200
labour hours =10000
for B
direct labours/unit 5
units= 1300
labour hours = 100000
sir, here why should we bother to calculate labour hours gain ? cant we use given labour hours to calculate OAR?
2. why we use labour hours instead of number of units to calculate OAR when given more than one products?
I am sorry but without seeing the full question to which you are referring, I cannot really help.
sorry sir.. I posted half question.. ny, I got it later 🙂
sir, how absorbtion costing and ABC can be used in service sectors? arent they suppose to be used only in manufacturing?
ABC can be used in service sectors, but it is more difficult in practice to determine the cost centres and the cost drivers than it is in manufacturing businesses.