i have 2 questions-
1)a job requires 4590 actual labour hours for completion and it is anticipated that there will be 10% of idle time.if the wage rate is $8 per hour,what is the budgeted labour cost?
2)a job requires 380 active labour hours to complete.it is expected that there will be 5% idle time.the wage rate per hour $6 per hour.what is the labour cost?
can u send the answers if possible with a brief explanation.
1. For every 100 hours paid, there will be 10 idle hours and therefore only 90 hours will be worked.
Putting it the other way round, for every 90 hours of work they need to pay for 100 hours.
Therefore if they need 4,950 hours of work they will have to pay for 100/90 x 4950 = 5,500 hours at the rate of $8 per hour. So a total cost of $44,000.
2. The logic is exactly the same. So they will have to pay for 100/95 x 380 = 400 hours at $6 per hour.
is there a difference between actual labour hours and active labour hours in the above Qs?
‘actual labour hours for completion’ and ‘active hours’ both mean the same thing.
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