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y plc produces widgets each widget should take 0.5 hrs to make, the standard rate of pay is 10 per hour,idle time is expected to be 5% of hours paid, they actually produced 10800 units, they paid 50000 for 6000 hrs of which 330 hours are idle.whats is the excess idle time variance.
would you kindly advice of how the answer was arrived at
You are obviously not watching our free lectures. The lecture on idle time variances explains exactly how to do this.
The actual idle hours = 330. The standard idle hours = 5% x 6,000 = 300.
Therefore there are 30 excess hours.The standard rate per working hour = $10/0.95 = $10.5363
Therefore the variance = 300 x $10.5363 = $316
(Our lectures are a complete course for Paper F5 and cover everything needed to be able to pass the exam well.)
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