Objectives of Labour Capacity utilization
Objectives of labour capacity utilization
is to determine that how much of available resources of firm are being
utilized. This concept also gives information about the availability of
resources for new project. The labour capacity utilization is calculated by
following simple formula
Labour
Capacity utilization Ratio = Hour Spent by Labour x 100
Total Available hour
Example
Labour
Hours available for projects= 2000
Total
hours utilized or spend by Labour = 1600
How
resources were used?
Solution
Labour
Capacity utilization Ratio = Hour Spent by Labour x 100
Total
Available hour
= (1600/2000) x 100
=80%
80% of labour resources were utilized by the entity.
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