Labour Capacity & Labour efficiency Ratio's.

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:08AM in AAT student discussion
My first post, hope you can help.<BR><BR>Please could you tell me the figures used to calculate the labour capacity & labour efficiency ratio in task 2.1 for PEV jun 04 and the labour capacity ratio for task 2.1 for nov 04.<BR><BR>Many thanks<BR><BR>Mike MS<BR>

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Labour Capacity & Labour efficiency Ratio's.

    I can help you for the June'04 paper. Just one thing, I believe we call 'labour rate variance' what you refer to as 'labour capacity'. <BR>For the labour rate variance, you should have (S - A) x A hrs = (6 - 6.20) x 4,200 = 840(A). For the labour efficiency variance, you should have (S - A) x S rate = (4,500 - 4,200) x 6 = 1800(F).<BR>Hope that helps, let me know if you meant overhead capacity variance and not labour rate variance which I have given you.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Labour Capacity & Labour efficiency Ratio's.

    Aah I've found the answers I put for November'04 now too so you're in luck!! You should have: Labour Capacity Ratio = Budget hrs/ Capacity hrs x 100, which gives 107.1% for Factory A and 60.7% for Factory B.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Labour Capacity & Labour efficiency Ratio's.

    Okay here goes.....<BR><BR>Nov 04, the figures you use for the labour capacity ration for Factory A is 75,000 / 70,000 = 107.1% The 75,000 is the budgeted hours and 70,000 is the capacity hours given in point 4 of the information given. Hope that helps!<BR><BR>June 04, the figures you use for capacity are<BR>Actual 58,200 / 60,000 x 100 = 97%<BR>Budget 60,000 / 60,000 x 100 = 100% <BR>The 58,000 is the direct labour hours actually worked. The 60,000 is the budgeted direct labour hours.<BR><BR>For Efficiency<BR>Budget is straight forward all you do is 60,000/60,000 x 100 = 100%<BR>Actual you need to work out how many budgeted hours it takes to make one desk..... 60,000/12,000 = 5 hours then times that by 11,200 (the amount of desks actually made) = 56,000. Therefore 11,200 desks should have taken 56,000 hours to make but it did take 58,200 hours. The calculation is then 56,000/58,200 x100 = 96.2%<BR><BR>Well I hope that helps. Sorry if I've confused you more.<BR>Good luck<BR>Jones<BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Labour Capacity & Labour efficiency Ratio's.

    Sorry I answered the wrong question for June'04, I was answering variances and not ratios. Never mind, someone else seems to have bailed me out anyway!!

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