Labour ratios

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Does anyone know a good way to remember the formulae for labour ratios?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    Hi

    Could you be more specific about which labour ratios
    Eva :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    Labour capacity, Labour efficiency and Labour expenditure.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    We did this last night at college

    S A S Special Army Services
    - - -
    B B A Best British Army


    V C E Very Clever Edward (Our Tutor)


    S = Standard Hrs
    A = Actual Hrs
    B = Budgeted Hrs

    V = Volume = SH/Bh
    C = Capacity = AH/BH
    E = Efficiency = SH/AH

    Remember this and write it down in the exam you can refer to it when needed.

    Hoep this helps

    Jackie
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    Hi,

    I found the following really useful and easy to remember the "PURE AS" (or "Pure as as" as it reads) method for materials and labour: -

    Price (material) standard - actual x Actual
    Useage (material) standard - actual x Standard
    Rate (labour) standard - actual x Actual
    Efficiency (labour) standard - actual x Standard

    and for Overhead variances : -

    ABC (the alphabet) Actual - Budget x absorb rate = Capacity
    SAE (Stamped addressed envelope) Standard - Actual x absorp rate = Efficiency
    SBV (Silly bloody variances) Standard - Budget x absorb rate = Volume

    I find silly rhymes for things like these make them easier to remember.

    Hope this helps you too!!!

    Eva :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    Thanks Eva
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    And thanks Jackie
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    Before you answer a question
    STOP AND THINK

    Then
    If the Standard hours produced are more than the Budgeted hours you can expect a ratio of more than 1 (or over 100%) for the VOLUME

    If the Actual hours worked are more than the Budgeted hours you can expect a ratio of more than 1 (or over 100%) for the CAPACITY

    If the Standard hours produced are more than the Actual hours you can expect a ratio of more than 1 (or over 100%) for the EFFICIENCY

    If you've seen my postings you'll see I am far more interested in understanding what is going on than learning formulae
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Labour ratios

    Thanks for your help Sandy, I find it much more easy to understand looking at it that way rather than looking at formulae

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