High School

3. Calculate Direct Labour Hour Rate from the following:

Total number of workers: 100;
Working days in a year: 300;
No. of hours per day worked: 8;
Short and idle time: 5%;
Factory overhead: ₹11,400;
Gift to workers: ₹1,000.

Answer :

To calculate the Direct Labour Hour Rate, we need to determine the total effective working hours for all workers and then apply the factory overhead and any additional costs. Here's the step-by-step calculation:

  1. Calculate Total Effective Working Hours:

    • Total number of workers = 100
    • Working days in a year = 300
    • Working hours per day = 8
    • Total working hours = Total number of workers [tex]\times[/tex] Working days [tex]\times[/tex] Working hours per day
      [tex]\text{Total working hours} = 100 \times 300 \times 8 = 240,000 \text{ hours}[/tex]
    • Adjust for short and idle time (5%):
      [tex]\text{Effective working hours} = 240,000 \times (1 - 0.05) = 240,000 \times 0.95 = 228,000 \text{ hours}[/tex]

  2. Calculate Total Cost:

    • Factory overhead = ₹11,400
    • Gift to workers = ₹1,000
    • Total cost = Factory overhead + Gift to workers
      [tex]\text{Total cost} = 11,400 + 1,000 = ₹12,400[/tex]

  3. Calculate Direct Labour Hour Rate:

    • Divide the total cost by the effective working hours:
      [tex]\text{Direct labour hour rate} = \frac{\text{Total cost}}{\text{Effective working hours}} = \frac{12,400}{228,000} \approx ₹0.054 \text{ per hour}[/tex]

Therefore, the Direct Labour Hour Rate is approximately ₹0.054 per hour.

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