ECR past paper Dec 2003

Sally5065

Hi,

My mind has gone blank!!! I am completing task 2.3 on the past exam paper December 2003. There is a limiting factor for labour hours of 3,000. I can't remember how to get to Labour hours per unit.

I have the filled out the unit contribution for each product and when looking at the answer sheet for labour hours per unit I can't think of the calculation to do this. They have 0.5 for Exe, 0.4 for Wye and 0.4 for Zed. What formula is used for the contribution per labour hour also?

Thanks


Sally

keane155

Hi,

Labour hours per unit is number of Labour hours divided by number of units

e.g. EXE 1000 labour hours divided by 2000 units = 0.5 labour hours per unit.

Contribution per labour hour is contribution per unit divided by number of labour hours.

e.g. EXE 17.5 (contribution per unit) divided by 0.5 (labour hours per unit) = 35 contribution per labour hour.

Hope this helps.

Emma

Sally5065

ECR past exam

Hi Emma,


Thanks for your help.

Sorry to be thick - Can I just clarify the labour hours per unit:-


I do not get 0.4 for Wye and Zed.
Wye - 1,000 direct labour hours / 3,000 for Wye = 0.33
and for Zed 1,000/ 5,000 = 0.2.

I don't understand how they get 0.4 for both - sorry if this sounds thick - I have looked through my study books but it isn't any clearer!!!

I'm suring it is staring me in the face.......


Regards


Sally

keane155

Hi Sally,

You need to look at labour hours for each product EYE/WYE/ZED individually.

For Wye there are 1200 labour hours available, and 3000 units.

Labour hours per unit is 1200/3000 = 0.4 labour hours per unit for WYE.

For Zed you have 2000 labour hours available and 5000 units.

Labour hours per unit for Zed is worked out as 2000/5000 = 0.4 labour hours per unit for Zed.

You are not being thick, I couldn't understand it when I first learnt about it.

Emma

Sally5065

ECR past exam paper

Hi Emma,

Thank you for your help. I was confusing myself with the calculations.


Regards