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When calculating the assembly labour, I did:
$12.60 x 30/60 = $6.3
10% x $6.3 = $0.63
6.3+0.63= $6.93
In the practice answers it’s $7. Excuse my ignorance but why it’s $7.
Thanks.The reason is that 10% of the hours that we pay for are idle, so only 90% of the hours that we pay for are worked.
So….if , for example, we pay for 100 hours, then we will only work for 90 hours.
We need to work for 0.5 hours, but we therefore need to pay for 0.5/90% = 0.55555 hours
We pay $12.60 per hour, and so it will cost us 0.55555 x $12.60 = $7.00(What you have done is just add on 10%, but this will not work. That would mean that working 30 minutes would need us paying for 33 minutes. However, if we pay 33 minutes but 10% of the time is idle, then we would only be left with 33 – 3.3 = 29.7 minutes. But we need 30 minutes work 🙂 )
The same ‘trick’ has occurred several times in exam questions. In fact the same trick applies to the wire used in Edward (but there the difference is very small and so to the nearest cent you would get the same answer).
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