Answered: How to calculate labor utilization?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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How to calculate labor utilization?

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Two significant execution measures are the normal labor utilization and the expense of direct labor.

Normal labor utilization: Normal labor utilization is characterized as the all-out labor content partitioned by the amount of labor substance and all-out inactive time. In the event that, for instance, the complete labor content is 30 minutes and the all-out inactive time is 10 minutes, the normal labor utilization is 30/40 = 0,75 = 75%. The normal labor utilization subsequently discloses to us the general presentation or efficiency of the cycle.

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