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Assembly labour – these are skilled people who are difficult to recruit and retain. Edward Limited has more staff of this type than needed but is prepared to carry this extra cost in return for the security it gives the business. It takes 30 minutes to assemble a radio and the assembly workers are paid $12.60 per hour. It is estimated that 10% of hours paid to the assembly workers is for idle time.
from this extract we have to find assembly cost.
I was trying to get my head around this sum, but was a little confused over one thing. How do i know if idle time is included within the 30minutes assembly time or not?
they have considered it as included and hence did: 0.5hrs/90%x12.6
but to me it seemed that radio assembling time in itself takes 30minutes(excl. idle time) and hence did .5x(1+10%)x12.6.Sir so how do decided in such cases whether idle time is included or not?
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