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company makes a product for which the standard labor time is 0.5 hours per unit. The budgeted production hours for a given week were 820. During the week the production staff were able to produce 380 units of products. staff worked and were paid for 800 hours. During the week 20 production hours were lost due to a shortage of material.
what is the efficiency ratio?
Answe is 97.43%I saw it solution Kaplan Solve that Question is that (380/.5)/780
My main Quesion is that why it divided by 380/.5.
Kindly give me a logic about it SirEfficiency ratio = (Standard direct labour hours of actual production ÷ actual direct labour hours worked) × 100%.
If 380 units were produced each taking a standard time of 0.5 hours, the standard direct labour hours of actual production would be 380 x 0.5 = 190.
Kaplan have got it wrong because they divided by 0.5 instead of multiplying.
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