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Sir
In your lecture while calculating the effective standard cost per hour; you said that we will be paying them at $5.70 but it will cost us $6 for every hour worked so
a) is it going to cost us $6 per hour because we will be paying them for 8hrs while they only work for 7.6hrs?
b) And why will we be paying them $5.70 while it is costing us $6?i am really confused here
If we pay them for 8 hours then we will pay them in total 8 x $5.70 = $45.60 (The question says that the pay rate is $5.70).
However of those 8 hours, 0.4 hours (5%) will be idle – time we are paying them for but when they are not working.
So they will only be working 7.6 hours, but we will still be paying them $45.60.So the cost for each working hour = 45.60 / 7.6 = $6
I am sorry sir but i am still not able to understand the difference between the two.
Could you please explain with a tiny example?But I gave you a tiny example in my previous reply, and I work through the example in my free lecture!!
I assume that you downloaded the lecture notes before you watched the lecture, and therefore had the example in front of you.
Work through what I wrote in my previous reply again, slowly.
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