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this is a part of a question :
it takes 30 mins to assemble a radio and the assembly workers are paid @12.60 per hour . it estimates that 10% of hours paid to the assembly workers is for idle time .
whats the labour cost per radio ? sir, in this iss this $12.60 includes 10% idle time also ryt ?
hhow to do the calculation ? please explain .For every 100 hours paid, 10 hours will be idle and therefore only 90 hours will be worked.
So it means that for every 90 hours they work, they need to pay for 100 hours.
So for 0.5 hours of work, they need to pay for 0.5 x 100/90 hours
So the cost for each unit will be 0.5 x 100/90 x 12.60 = $7.00
(PS You have headed up your question “Target Cost”. However this part of the question (Edward) is not target costing – it is estimating the actual cost).
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