Professional Documents
Culture Documents
products
Labour Costing
CAP
CAP
CAP
Overtime rates
There employees work beyond agreed hours ,
CAP
Overtime
rates
Example
The normal working week for a factory is 8hrs X 6days
=48hours.
Overtime is usually paid on the basis of overtime hour
being worth 1.5 hours ,
The wage rate for cutters is Rs20 per hour.
Person x is has worked a total of 53hours
Normal hours 48hrs @ Rs 20-----Rs960/------------------------Overtime hours 5 hrs
Enhanced to 7.5hrs (1.5times) @ Rs 20---Rs150/------------------------------------------------------------------GROSS PAY ------Rs 1110/- per week
CAP
Productivity Bonus
In order to promote productivity in the factory,
.
The labour hours that relates to specific jobs to be recorded
Cutting 1 x 2hrs @Rs 20 ---Rs 40/Sewing 4 x 2hrs x Rs14---Rs 112/Pressing 1 x 2hrs x Rs16---Rs32/----------------------------------------Direct labour cost ----Rs 184 /CAP
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Cost centers
Design room
Pattern cutting
Cutting room
Sewing rooms
Pressing room
Canteen
Maintenance
Cleaning
Factory personnel department
Warehouse & stores
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Labor costing
Two aspects of the role of labor costing.
Budgeting for production
&
Labor for individual styles.
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by the following
=Number of operators X Hours per week X
weeks per year X Average hourly earnings
A. Number of operators --150
B. Hours per week48hrs
C. weeks per year 48 weeks
D. Average hourly earnings Rs 20
E. Total annual direct labor = AxBxCxD
i.e 150x 48x 48x20 =Rs69,12,000/CAP
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x18 =Rs5598720.
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standard labor
= 69,12,000-55,98,720 = 23%
55,98,720
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Base rate
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with a breakdown.
A breakdown is a complete sequential list of
all operations involved in assembly a style.
The style can be broken into component parts
& subtotaled, or the production
standards(SAMs) for each operation can be
added together for the total garment.
Production time can be converted to cost in
rupee by determine the rupee value of each
minute .
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