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A manufacturing company currently produces 4500 units per week at 90% efficiency. The direct labour cost is $9,000.
What will be the first labour cost per unit(to two decimal places of $) if efficiency can be improved to 100%?
A- $1.82
B- $1.80
C- $2.20
D- $2.22Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – they have answer and workings 🙂
If they were 100% efficient, then they would be able to produce 4,500/90% = 5,000 units in the same time (and therefore the same cost).
Therefore the cost per unit would be 9,000 / 5,000 = $1.80.
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