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Sir,
Could you pls help me with this question.
A unit of product requires 9 active labour hours for completion.The performance standard for the product allows for 10% of total labour time to be idle, due to machine breakdown downtime.The standard wage rate is $9 per hour.
What is the standard labour cost per unit of the product?A. 72.90
B. 81.00
C. 89.10
D. 90.00For every 100 hours paid, there will be 10 hours idle and therefore 90 hours worked.
Or, putting it the other way round, for every 90 hours worked they need to pay for 100 hours.For this question therefore, they need 9 hours of work and so need to pay for 100/90 x 9 = 10 hours. They will pay for 10 hours at $9 per hour.
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