what is labour hour rate?
How is it ascertained?
Answers
Answer:
Explanation:
a COST RATE which is used in ABSORPTION COSTING to charge the OVERHEADS of a department or COST CENTRE in the cost of a product or job. The overhead charge for any product or job will depend upon the number of labour hours required for its production.
Labor rates are used to determine both the price of employee time charged to customers, and the cost of that employee time to the employer. ... This rate contains every possible cost associated with an employee, divided by the total number of hours worked by the employee.
You calculate the standard price by multiplying the direct labor hourly price by the standard job completion time. For example, one employee can produce 10 completed units in two hours. The direct labor hourly cost is $9 per hour and the standard direct labor time is two hours.
Ascertaining wages of different cost centres. Summarising the total deductions to post them to the accounts concerned. Ascertaining the total hours of each cost centre to calculate labour cost and rate per hour for control purpose.