Standard Labour Time Definition and Analysis
Standard labour time is the time officially allowed for completing a specific task or unit of work, determined by methods like work measurement. It serves as a benchmark for efficiency.
Evaluating Statements on Standard Labour Time
Let's examine each statement to determine which is true:
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Statement 1: Standard labour time indicates the time in hours needed for a specific process.
Analysis: This statement accurately defines standard labour time. It represents the measured and allowed duration, typically expressed in hours or fractions thereof, required to perform a defined task under specified conditions.
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Statement 2: It is standardized on the basis of past experience.
Analysis: While past experience can inform the process, standards are typically set through direct study (like time studies) and analysis, not solely based on historical data which might be inefficient or inaccurate. This statement is not the primary definition or requirement.
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Statement 3: In fixing standard time due allowance should not be given to fatigue and tool setting.
Analysis: This is false. Realistic standard times *must* include allowances for factors like worker fatigue, necessary machine adjustments (tool setting), and personal needs to ensure the standard is achievable and fair.
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Statement 4: The Production Manager does not provide any input in setting the labour time standards.
Analysis: This is false. Production managers possess crucial operational knowledge and are typically involved in setting realistic and achievable labour time standards.
Based on the analysis, the only true statement is the first one, which correctly defines standard labour time.
Important Questions from Cost accounting
Which of the following business would most likely use job order costing:
The following are the two statements regarding concept of profit. Indicate the correct code of the statements being correct or incorrect. Statement (I) : Accounting profit is a surplus of total revenue over and above all paid-out costs, including both manufacturing and overhead expenses.
Statement (II) : Economic or pure profit is a residual left after all contractual costs have been met, including the transfer costs of management, insurable risks, depreciation and payments to shareholders sufficient to maintain investment at its current level.
Highest in price first out method of valuation is used:
A Biscuit manufacturing concern employs:
Which of the following items is not included in cost accounting?
