How do you calculate contribution per labour hour?

Question

how do you calculate contribution per labour hour. selling price 70 labour @ 11.50 per hour 17.25, raw materials @ 7.35 per kg 22.05, variable overheads 6.70, fixed cost per unit 10.00, profit per unit 14.00

Answer 1

Believe the answer is $414.00 per labour hour:

profit of $14.00 per unit + fixed costs of 10.00 per unit = contribution of $24.00 per unit.

Contr of $24.00 per unit x 17.25 labour hours reqd per unit = contribution of $414.00 per labour hour.  

Answer 2

you can look at either revenue or profit

revenue/hours = revenue per hour

profit/hours = profit per hour  

Answer 3

First you need to work out how the profit of £14:00 was arrived at:

Selling price:         ÃƒÂ‚£70.00

Labour:                        -£17.25

Materials:                        -£22.05

Variable overheads:          -£6.70

Contribution:         ÃƒÂ‚£24.00

Fixed cost:        -£10.00

Profit:                         ÃƒÂ‚£14.00

Now contribution is £24 and this is for 11.50 hours.  Therefore, contribution per hour = £2.09.  This is arrived at by doing (24 / 11.50)

Hope this helps.