pcr labour efficiency

wolfe Registered Posts: 121 🎆 🐘 🎆
hi everyone

im doing this one question and need some help
the question says that according to the standard cost card it should take 2 labour hours to produce 1 unit however its anticipated that the workforce will be working at 92% efficiency.

does this mean that the 2 hours per unit in the cost card is @ 92% efficiency??
or is the 2 hrs /unit @ 100% efficiency??

thank you in advance


  • taskey
    taskey Registered Posts: 1,800
    what paper is that from?

  • mark130273
    mark130273 Registered Posts: 4,234
    reading that question i would say that it takes 2(/100*92) labour hours to produce one but they would only produce 92 in 200 hours .... if this makes any sense ?
  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034
    Mark is spot on

    This is not as common as wastage between raw materials that are issued from stores and raw materials that are used in production (e.g. apple peel) but it is the same principle.

    If you are producing 1196 units 2 hrs should be used to produce them if the staff are working at the normal level of productivity, but they need some more training so they are only 92% efficient then work out the hours required as follows
    Production.......................1,196 units
    Hours per unit----...............-..2 hours
    Total hours if proficient....... 2,392 hours
    Inefficiency adjustment............92%
    Total hours at 92% efficiency 2,600 hours

    In fact it takes 2.173913043 hours to do a 2 hr job because of the inefficiency.
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  • wolfe
    wolfe Registered Posts: 121 🎆 🐘 🎆
    thank you mark and sandy!
  • mark130273
    mark130273 Registered Posts: 4,234
    wow sandy i understand it !!! gee wizz must be ready for the exams !!
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