costing

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
i have been given some homework to do and im having trouble answering this particular task/question which is... " PH Healthcare Ltd. is, for a variety of reasons finding itself in need of temporary staf. Mention THREE areas where such arrangements could impact on the costing system of the Company"<BR><BR>Any help/suggestions will be very much appreciated,<BR><BR>Maddy.

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    costing

    Hi Maddy,<BR><BR>I have a few thoughts for your costing question. The first is that Temporary staff need time spent with them being "shown the ropes" This could take up a supervisor or other professional person's time. This could cost alot of money if the individual needs alot of attention in the early stages of his/her temporary employment. What about their dedication and attention to detail. Could this too be costly. Their work rate might be lower because they don't know the job very well, unfamilar with procedures etc. <BR><BR>I hope this may be of some help.<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    costing

    Think about overheads and their absorption Maddy. Employing extra staff will increase the Labour overheads incurred. Will the budgeted overhead absorption rate be enough to recover the extra expense? Will the fact that they dont know the job as well adversely effect the labour efficiency variance and I cant think of a third so you will have to make do with two. Sorry

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