Labour efficiency ration

This topic has 3 replies, 2 voices, and was last updated 9 years ago by John Moffat.

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June 12, 2016 at 10:07 am #322529
sxhawty
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In the last period an organisation budgeted to work 116,000 hours manufacturing 29,000 units. Actual output last period was 26,000 units which took 108,000 hours to manufacture

the formula to get the labour efficiency ratio is
standard hrs for actual output/actual hrs worked x 100

so; 26,000 units x 116,000hours = 3,016,000,000/108,000×100
im supposed to get the answer by percentage but what im getting is 27,925.9

why is it like that?
June 12, 2016 at 1:01 pm #322555
John Moffat
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Why on earth do you want to multiply 26,000 by 116,000? The question does not say that they took 116,000 hours each – that would be ridiculous – they take 116,000 hours in total.

(If they took 116,000 hours for each unit, it would mean they were taking over 13 years to produce one unit 🙂 )
June 20, 2016 at 6:31 am #323537
sxhawty
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i am confused, how do you get the answer then?
June 20, 2016 at 6:52 am #323542
John Moffat
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standard hours per unit = 116,000 / 29,000
Therefore standard hours for actual output = 26,000 x 116,000/29,000 = 104,000
Actual hours worked = 108,000

Now you can use the formula that you typed before.
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