4. Accounting for Labour (p99)

Question 1

How is labour turnover calculated?

Answer 1

Labour turnover %
= (Number of leavers who require replacement / average number of employees) × 100

Question 2

How is labour efficiency ratio calculated?

Answer 2

% =
(Standard hours for actual output / actual hours worked to produce output) × 100

Question 3

How is idle time ratio calculated?

Answer 3

% =
(Idle hours / total hours) × 100

Question 4

How is labour capacity ratio calculated?

Answer 4

% =
(Actual hours worked to produce output / total budgeted hours) × 100

Question 5

How is labour production volume ratio (aka activity ratio) calculated?

Answer 5

% =
(Standard expected hours for actual output / total budgeted hours) × 100