Labour Efficiency Ratio Formula
Labour efficiency ratio
explain, how efficiently labour worked on a project. It is important to
remember that efficiency ratio effective was to assess the performance of the
labour. High efficiency ratio reflects good performance, while low efficiency
ratio show poor performance.
Labour
Efficiency Ratio = Expected Time. x 100
Actual
Time
Example
Labour
required per Unit = 5 Hours
20
units produced
Actual
hour taken = 80 Hour
Solution
Standard hours = 20 unit x 5 hr= 100 hrs
Labour
Efficiency Ratio = Expected Time. x 100
Actual
Time
100/80 x 100
= 125%
It means that 25% more efficiently than expectation.
