[b]Equivalent Labour Units[/b]

System

Can anyone help me with calculating equivalent labour units? I am really stuck on this subject and failed my simulation so really need some guidance for the exam and retake!
many thanks
luce

System

Re:Equivalent Labour Units

Equivalent labour units refers to process costing where there is a closing work in progress.

Find the total number of units produced.

Then look at the closing work in progress, this is likely to have only used part of the labour time need so multiply the number of part finished units by the %completion to find the equivalent number of completed units.

Here's my example:

Cooking ready meals
We have to do the beef roasting process which involves,

Cutting the meat into roasting size joints

then putting them on roasting trays

then putting them in the oven for 2 hours

then taking them out

then carving them

At the end of our shift we have roasted 100 joints of beef and have another 20 prepared on roasting trays ready to go into the oven tomorrow.

I reckon the work we do is 60% before they go in the oven 40% after they come out.

So our work has enabled us to:-

produce 100 finished joints

produce 20 60%-finished joints or the equivalent of 12 finished joints

So we produced (100 + 12) 112 equivalent labour units

sandy.hood@chichester.ac.uk