[devanshi]

Sir, I am confused about a number in bpp.
A company manufactures a single product, M. Budgeted production output of product M during August is 200 units. Each unit of product M requires 6 labour hours for completion and PR Co anticipates 20 per cent idle time. Labour is paid at a rate of 7% per hour. What is the the direct labour cost budget for August?
A) $6720
B) $8400
C) $10080
D) $10500

Answer
Active hrs required for pdtn (200*6 hrs) =1200
Allowance for idle time( 20%=25%). = 300
————
Total hours to be paid for. 1500
*$7 per hour.
Direct lbr cost budget. $10500

Sir I would like to know how the idle time of 20 percent changes to 25 percent of active hrs worked.

[Author]

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