Capacity Minutes and Industry Norms




Activity Based Costing
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Karlene
South Africa

Capacity Minutes and Industry Norms

Productivity levels in minutes - productive time
Work days are about 480 minutes (8 x 60). Where could I find what the industry norms are? Are there examples that show the average for the industry to be for example 60% capacity (288 minutes) or other and what is the norm?
 

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Hariom Agrawal
Director, India
 

Capacity and Industry Norms

Capacity in any industry is the outcome of the process and resources used. There can not be any standard norms as generalized norm. The capacity and norm of the machine is defined by the machine manufacturer, whereas the capacity of a human resource depends upon the nature of the task / activity and environmental conditions around.
The objective is to benchmark to minimize the gap between the cost estimation and actual cost in any industry.

 
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Rajendra Patil
Consultant, India
 

Capacity in ABC

When I perform ABC modeling I use the following method which is generally accepted by the clients:
# of days - calendar days - weekly off - average paid leaves
# of hours - 8 - lunch break - natural breaks
Efficiency - 80%
The values of these calculations give the # of minutes per day per person.
Now we have to convert the 'headcount' into the full time equivalent (FTE)'. For this all the persons who perform the day-to-day activities taken in the ABC model are taken as 1 FTE. For the supervisors it depends on the % of their time devoted to the daily activities.
In all of this, the employees on roll as well as those on contract are considered.

 
0
Hariom Agrawal
Director, India
 

Rate Calculation

ABC is a model where calculations need to be made close to actual process / reality. This helps in r... Sign up

 
0
Rajendra Patil
Consultant, India
 

Capacity in ABC

Your first statement is very true. But in practical situations we try to go as near as possible. It ... Sign up

   

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