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A unit of product L requires 9 active labour hours for completion . the performance standard allows for product L allows for ten per cent of total labour time to be idle, due to machine downtime. The standard wages rate is 9 dollars per hour .what is the standard labour cost per unit of product L?
Standard labour cost per unit = 9 hours * 100/90 *9dollars = 90 dollars
My question is why is the idle time not part of the standard labour cost because what I know is employees are paid also for the idle time..
Idle time is part of the standard labour cost – that is why the cost is calculated for 9 x 100/90 = 10 hours!!
(They are paid for 10 hours of which 1 hour is idle and 9 hours are active working.
Thank you sir I andestand that part now but what is the 100/90 representing and how did they come up with that proportion .
I have seen these types of questions but I always miss it on the proportions please help me understand how to deal with turning percentages into proportions.For every 100 hours they pay for, 10%, so 10 hours will be idle and 90 hours will be worked.
So, putting it the other way round, for every 90 hours worked they will have to pay for 100 hours.
So the number of hours they pay for will be 100/90 times the hours that they work.
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