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Confusion

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Confusion

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by John Moffat.
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  • August 1, 2017 at 9:03 am #399779
    Ema
    Member
    • Topics: 73
    • Replies: 107
    • ☆☆

    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
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    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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