· Standard hrs allowed per product (standard rate rs. 5/hr) For product A 5 hrs n for product B 4 hrs
· Overtime premium is 50% and is payable if a worker works for more than 40 hrs a week, there are 90 workers.
· Target productive ratio(efficiency ratio )for the productive hrs worked by direct workers in actually manufacturing the product is 80 %. In addition ,non productive downtime is budgeted @ 20 % of productive hrs worked.
· There are 12 5 days week in the budget period.
· Budgeted production of A is 3480 units n Product B 4000 units.
Calculate labour cost.
CAclubindia
