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compute the standard unit labour cost of the product 608683

The following was the composition of a gang of workers in a factory during a particular month, in one of the production departments. The standard composition of workers and wage rate per hour were as follows:

Skilled: Two workers at a standard rate of Rs. 20 per hour each.

Semi-skilled: Four workers at a standard rate of Rs. 12 per hour each.

Unskilled: Four workers at a standard rate of Rs. 8 per hour each.

The standard output of the gang was four units per hour of the product.

During the month in question, however, the actual composition of the gang and hourly rates paid were as follows:

Nature of Worker

No. of Workers

Wage Rate Paid Per Worker Per Hour Engaged Rs.

Skilled

2

20

Semi-skilled

3

14

Unskilled

5

10

The gang was engaged for 200 hours during the month, which included 13 hours when no production was possible, due to machine break down and about 810 units of the product were recorded as the output of the gang during the month.

You are required to:

  1. Compute the standard unit-labour cost of the product.
  2. Compute the total-variance labour cost during the month.
  3. Analyse the variance in B above into sub-variances and reconcile.

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