Employee costs as a percentage of labour turnover question

Hi, i have an answer but just want to see if people agree with me. :smile:

The data below relates to a factory.
capacity = 180 units per day
number of employees = 16
wages per day = £60 per employee
selling price = £15 per unit
capacity utilisation = 80%

Assuming that all output is sold, calculate the factory's employee costs as a percentage of turnover

Reply 1

Eddkings

2

hello i can help you confirm the answer

Reply 2

kwiffwaf

OP

4

Original post by Eddkings

hello i can help you confirm the answer

Hi @EddKings i got 28.4% is this right ?

16X60=960
new capacity = 225
225X15=3375

960
---------- X100 = 28.4%
3375

(edited 2 years ago)

Reply 3

AndM12

5

Original post by kwiffwaf

Hi @EddKings i got 28.4% is this right ?

16X60=960
new capacity = 225
225X15=3375

960
---------- X100 = 28.4%
3375

Hi! Thought since I didn’t see anyone respond, I’d just tell you what the answer was!
We did this in class the other day and our teacher sent us the mark scheme for it.

Employee Costs: 16 x £60 = £960
Turnover: £15 x 180 = £2700

960
————— x 100 = 35.5%
2700

Reply 4

kwiffwaf

OP

4

Original post by AndM12

Hi! Thought since I didn’t see anyone respond, I’d just tell you what the answer was!
We did this in class the other day and our teacher sent us the mark scheme for it.

Employee Costs: 16 x £60 = £960
Turnover: £15 x 180 = £2700

960
————— x 100 = 35.5%
2700

Thanks !

Reply 5

fsdfesdfesdfeshf

4

Original post by AndM12

Hi! Thought since I didn’t see anyone respond, I’d just tell you what the answer was!
We did this in class the other day and our teacher sent us the mark scheme for it.

Employee Costs: 16 x £60 = £960
Turnover: £15 x 180 = £2700

960
————— x 100 = 35.5%
2700

That can't be right it has to be 44.4%

Reply 6

Semaj660

2

Original post by fsdfesdfesdfeshf

That can't be right it has to be 44.4%

Hope this helps anyone reading this in future

((16x60)/(180x0.8x15))x100 = 44.4%
assuming 180 units "capacity" is max capacity then it would seem right that you multiply 180 by the current utilisation of 80% (180x0.8) which would be 144 units

((16x160)/(180x15))x100 = 35.5%
if the mark scheme is correct then it seems like they haven't accounted for capacity utilisation

UPDATE: just found the paper and mark scheme
https://filestore.aqa.org.uk/sample-papers-and-mark-schemes/2020/november/AQA-71321-W-MS-NOV20.PDF
Screenshot 2023-05-14 170224.png

Reply 7

WillBrushfield

3

Hey!
So for this question, it was actually a mistake by AQA in the paper. The question was flawed as it was phrased 'all the output is sold', not taking into account the question of 'does all output mean capacity or capacity utilisation', so marks were awarded for both correct answers.
I am not entirely sure how it was awarded in the exam as apparently they awarded full marks for either, but was a mistake by AQA in the question's wording.

Employee costs as a percentage of labour turnover question

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