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Question relating Labour
Qn : budgeted production for the next period is 4800 units, each unit requires 5 labour hours to make. Labour is paid 10 per hour. Idle time represents 20% of total labor. What is the budgeted labour cost for the next period??For every 10 hours they pay for, 2 hours will be idle and therefore only 8 hours will actually be worked.
Putting it the other way round, for every 8 hours of work they will have to pay for 10 hours.
So for 5 hours of work they are going to have to pay for 10/8 x 5 = 6.25 hours.
(Why are you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers – they contain answers and workings 🙂 )
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