Labour Control Ratios

Question 1

How would you calculate labour activity ratio

Answer 1

Standard hours for actual output/budget hours

Multiplied by 100%

20000 standard units budgeted for
Each unit should take 1.2hrs
20400 units made in 21080 hrs

20000 * 1.2/
20400 * 1.2
* 100%

Question 2

What does the labour efficiency ratio tell you

Answer 2

Were units produced in more or less time than planned

How efficiently the workforce worked

Question 3

How do you calculate the labour efficiency ratio

Answer 3

Standard hours for actual output/actual hours
*
100%

20000 standard units budgeted for
Each unit should take 1.2hrs
20400 units made in 21080 hrs

20000 * 1.2/
21080
* 100
=104.74%

Question 4

Is a labour control ratio better if it is over or under 100%

Answer 4

Over 100 %

Question 5

What is the capacity ratio

Answer 5

Actual hours/
Budgeted hours
*
100

20000 standard units budgeted for
Each unit should take 1.2hrs
20400 units made in 21080 hrs

21080/(20000*1.2)
* 100
=97.59%

Question 6

What should the labour capacity ratio tell you

Answer 6

We’re there more or less hours in total available than planned

If more or fewer hours were worked than budgeted

Had people not turned up or were there more people sick than expected