## Labour Utilisation
Labour utilisation measures how effectively paid labour time is converted into productive output. It links three key metrics:
1. Actual time paid — total clock hours for which wages are paid
2. Standard time allowed — hours that should have been taken for the actual output produced (includes allowance for normal idle time)
3. Abnormal idle time — gap between paid time and standard time, due to abnormal causes
Labour Efficiency = Standard time allowed ÷ Actual time paid × 100%
---
## Weekly Labour Utilisation Statement
Prepared for each department or cost centre; contains:
- Actual hours paid
- Standard hours allowed for actual output
- Analysis of abnormal idle time with causes (controllable/uncontrollable)
---
## Wage Analysis Sheet
Breaks down total wages by cost centre, job, and work order. Data sourced from:
- Wage sheets
- Time cards
- Piece work cards
- Job cards
---
## Identifying Labour with Cost Centres and Work Orders
| Labour Type | How Identified |
|---|---|
| Direct labour | Traced to specific work orders, batches, or capital jobs via time sheets / job cards |
| Indirect labour | First traced to cost centres, then allocated to work orders using overhead absorption rates |
### Categories of Wage Payment (per Cost Accounting Dept analysis)
1. Direct cost — wages attributable to specific products/jobs → charged to job cost
2. Indirect employee cost — wages absorbed into overheads
3. Cost of idle time — normal (in overhead rate) and abnormal (to Costing P&L)
4. Abnormal loss/gain — unexpected wage impact transferred to Costing P&L