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Hello, i would like to know if Advanced Idle time Variances are in the syllabus for the F5 exam in June 2016
They are in the syllabus (although the examiner has never asked it yet).
But i have not found them in the study guide from acca website. Can they ask us in june about idle time variances if it is never asked?
It certainly can be asked, but it is unlikely.
However, there is one idea that relates to it which does come up quite often (even though it is not in variances).
Suppose a product needs 8 hours of work per unit to manufacture. Suppose 20% of the time paid for is idle. Suppose they pay at the rate of $5 per hour.
In order to make one unit, they need 8 hours for work, which means that they need to pay for 100/80 x 8 = 10 hours. (20% of 10 is 2 hours idle, so 8 hours work).
So the labour cost to make one unit = 10 x $5 = $50.Don’t worry about the variance itself for June, but do make sure you grasp the point above (because it could be relevant in all sorts of different questions) 🙂
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