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Hello sir , i have done a mock exam and i don’t understand the answer of few questions ,That’s one :
Each of the new desks will require 45 minutes of skilled labour to assemble ,and these workers are paid $ 6.30 per hour.It is estimated that 10% of the hours paid to the workers will be for idle time .
How much per unit should be included in the costing for the desks in respect of labour (to the nearest cent)?
The answer is $ 5.25.
Thanks in advance for ur explanation!
For every 100 hours that they are paid, they will be idle for 10 hours and will therefore only work for 90 hours.
Putting it the other way round, for every 90 hours of work they will be paid for 100 hours.
So….if a unit needs 45 minutes (i.e. 0.75 hours) of work, they will have to pay for
100/90 x 0.75 = 0.8333 hours and the cost will be 0.8333 x $6.30 = $5.
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