Confusion

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August 1, 2017 at 9:03 am #399779
Ema
Member
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Please can you explain what does it mean
Product X$ per unit Y $ per unit Z $ per unit
Direct materials 25 28 22
Direct labour ($12 per hour) 30 36 24
According to my understanding it should be that X uses $25 per unit of material and $30 is paid for labour per unit so what is $ 12 per hour .
I guess that’s a bit silly question but i am stuck in to it.
Kindly help me in to this.
Thanks in advance.
August 1, 2017 at 9:42 am #399793
John Moffat
Keymaster
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If the labour is $30 per unit, and labour is paid at the rate of $12 per hour, then it means that each unit must be taking 30/12 = 2.5 hours to produce.
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