Labour Capacity utilization Formula

Labour Capacity utilization Formula

Labour capacity utilization formula may be calculated by dividing labour hours spend on job with total labour hours available. It is important to mention that capacity utilization has no relationship or linkage with efficiency. This formula can be expressed mathematically as follow;

Labour Capacity utilization Ratio =   Hour Spent by Labour   x 100

                                                  Total Available hour

Example

Total hour available = 1200

Hour worked = 950

Calculate Labour Capacity utilization?

Solution

Labour Capacity utilization Ratio =   Hour Spent by Labour   x 100

                                                  Total Available hour

=(950/1200) x 100

=79.16%