Budgets

Hello John,

From one exam kit:

A company manufactures a single product. Budgeted production output of product M during august is 200 units. Each unit of product M requires 6 h of labour for completion and the company anticipates 20% idle time. Labour is paid at a rate of 7$ per h. What is the direct labour cost budget for August?

SOLUTION:
Active hours required for production = 200x6h= 1200.
Allowance for idle time (20% of total time = 25% of active time) = 300
Total hours to paid for = 1500
x 7$ p.h. 10,500$.

I totally don’t get the point of this -> (20% of total time = 25% of active time)

Honestly, it does not make any whatsoever sense.

Please kindly advise.

Thanks

Cheers