[mhsimon9999]

@johnmoffat said:
The actual cost = 38/0.95 = 40.
Material is 10, so labour is 30.
Labour is paid 8 per hour, so it must be 30/8 = 3.75 hours

Required cost is 38.
Material is 10 so labour is 28.
At 8 per hours, this is 28/8 = 3.5 hours

As it is mentioned in the question about the efficiency changes will have no effect on current material cost per unit, why did we not subtract the material cost per unit of $10 during the actual cost calculation?

[mhsimon9999]

Got it. Thanks for the help, John.

[mhsimon9999]

Ah, okay. But could you please give me the link of that specific lecture where I would find the explanation about solving that question?

[mhsimon9999]

Thanks to you for the help. I got understand the difficulty of this question.

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