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John Moffat.
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hermela
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Sir, I am very thankful because of getting you.
My question is on Pm mock exam ,which I get in this website, no 17 is not clear for me.
Each of new desks will require 45 min of skilled labour to assemble and these workers are paid 6.30 per hr it is estimated that 10% of the hour paid to the worker will be idle time . how much per unit should be included in costing.
Sir I have got the answer but I couldn’t find the solution with explanation.
John Moffat
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For every 100 hours that they pay for 10 hours will be idle and therefore only 90 hours will be worked.
Putting it the other way round, for every 90 hours of work they will need to pay for 100 hours.
Here, each unit takes 45/60 hours of work, and therefore they need to pay for 100/90 x 45/60 hours. So the cost per unit is 100/90 x 45/60 x $6.30 = $5.25.
hermela
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