# idle time & variances

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This topic contains 3 replies, has 2 voices, and was last updated by  John Moffat 4 years, 5 months ago.

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• gutsychyk
Participant

quick question
consider total time spent on a job 8500
however 500 was idle time
so when we calculate variances
Labour rate = take 8500
labour efficiency = take 8000
idle = 500 x st rate
variable oH =do we calculate on 8500 or 8000
fixed oh= do we calculate on 8500 or 8000
thanks

John Moffat
Keymaster

For variable overheads and fixed overheads capacity and efficiency variances, you use the actual hours worked (8000). Idle hours paid are irrelevant for overhead variances – we assume that no overheads are incurred during idle hours.

gutsychyk
Participant

many thanks…thts wht i needed. quick answers for my all little little questions. thanksalot again

John Moffat
Keymaster

You are welcome.

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