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Using the data in Extract F, calculate the monthly labour cost per car - Edexcel - A-Level Business - Question 2 - 2018 - Paper 2

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Using the data in Extract F, calculate the monthly labour cost per car. You are advised to show your working.

Worked Solution & Example Answer:Using the data in Extract F, calculate the monthly labour cost per car - Edexcel - A-Level Business - Question 2 - 2018 - Paper 2

Step 1

Calculate Monthly Labour Productivity

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Answer

To calculate the monthly labour productivity, divide the monthly output by the number of production workers:

extMonthlyLabourProductivity=Monthly OutputNumber of Workers=20,000400=50 cars per worker ext{Monthly Labour Productivity} = \frac{\text{Monthly Output}}{\text{Number of Workers}} = \frac{20,000}{400} = 50 \text{ cars per worker}

Step 2

Calculate Total Monthly Labour Cost

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Next, calculate the total monthly labour cost for the workers:

extTotalMonthlyLabourCost=Number of Workers×Labour Cost per Worker=400×£2,000=£800,000 ext{Total Monthly Labour Cost} = \text{Number of Workers} \times \text{Labour Cost per Worker} = 400 \times £2,000 = £800,000

Step 3

Calculate Labour Cost per Car

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Answer

Finally, to find the labour cost per car, divide the total monthly labour cost by the monthly output:

extLabourCostperCar=Total Monthly Labour CostMonthly Output=£800,00020,000=£40 ext{Labour Cost per Car} = \frac{\text{Total Monthly Labour Cost}}{\text{Monthly Output}} = \frac{£800,000}{20,000} = £40

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