pcr labour efficiency

wolfe · June 2009

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 · June 2009

what paper is that from?

Tracy

mark130273 · June 2009

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 · June 2009

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.

wolfe · June 2009

thank you mark and sandy!

mark130273 · June 2009

wow sandy i understand it !!! gee wizz must be ready for the exams !!

pcr labour efficiency

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