Answer to Question #293898 in Management for Sweety

Question #293898

Describe the role of labour standards.

1
Expert's answer
2022-02-07T02:57:02-0500

The quantity of labor time required to complete a task is referred to as a labor standard. The concept is used in the budgeting and planning processes to determine how many employees should be assigned to a task. For example, a corporation can decide that, given the amount of a labor standard, it needs to run production in three shifts to match the sales forecast's requirements. Employee performance can be judged using a labor standard, which can be tied to bonus and retention strategies. For examle, a bonus may be given to an employee who can generate more than 10 units per hour. Someone who cannot consistently create at least eight units per hour after an appropriate training period, on the other hand, will be fired or compelled to complete extra training. To arrive at a billing rate that is charged to a customer, a profit margin might be added to a labor standard. A print business, for example, could use a regular hourly rate to come up with an estimate for a customer order. To generate labor variants, labor standards are usually employed. A labor efficiency variance occurs when the quantity of time indicated in a standard is contrasted to the amount of real labor experienced.Or, the standard cost associated with a labor standard is compared to the actual labor cost incurred, which results in a labor rate variance.


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