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Employees in a period: opening=100 and closing=800. labour turnover ratio=25%.
Assuming not all were replaced how many employees left the organization?How to do this question?
Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved publishers, they have answers and explanations!!!
The number who left was 25% x ((100 + 800)/2) = 112.5.
The second sentence does not make any sense in that obviously they were all replaced otherwise they would not end up with 800 employees!!
Have you watched my free lectures on ‘Accounting for labour’? The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
hii sir
for a question on residual income if we have depreciation charged on net assets , do we have to include the depreciation also?You must start a new thread when you are asking about a different topic – this has nothing to do with the labour turnover ratio!!
We use the profit when calculating the residual income, and depreciation is an expense in arriving at the profit and so is relevant. However if we are using residual income to measure the performance of the manager of the division then we use the controllable profit. Depreciation is then only relevant if the manager makes decisions on the non-current assets purchased. If head office makes decision on the non-current assets of the division, then the depreciation is not controllable by the divisional manager and is not relevant.
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