pev PEV june 04 exam task 2.1 a) vi)

jimbob

having done the exam and checked answer my answer is wrong and i cant see how the answer is worked out as answer on site do not include working or formula
question is calculate the labour efficiency ratio
i was taught lab eff is standard hr for actual prod/ actual hrs worked yet the answer booklet gives diff answer can anyone help with the working for this ratio
any advice appreciated

Marg22

Hi

You have to look at the budgeted number of hours it takes to produce one desk.

Budget 60,000 hrs / 12,000 desks = 5 hrs per desk

Acutal desks produced were 11,200 x 5 hrs = 56,000 hrs. This is the amount of time it should have taken to produce 11,200 desks.

Hours it should take 56,000/ actual hours it did take 58,200 x 100 = 96.2%
This ratio shows that the company was not as efficient as the budget.

The budget result is of course 100% because it sets its target and obviously hits it.

Hope this helps

Regards

Marg

jimbob

thanks thats brilliant
why cant they include working in exam answers on this site would have cleared it up in a jiffy