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Forums › ACCA Forums › ACCA MA Management Accounting Forums › Budgeted total cost for the next period question
Here’s the question
114) budgeted production in a factory for next period is 4800 units. Each unit requires five Labour hours to make. Labour is paid $10 per hour. Idle time represents 20% of the total Labour time.
Okay so my question is, why do you divide my 0.8 and not multiply by 1.2 (I.e increase time taken by 20% to cover the 20% idle time)
I’m still stuck after watching lectures.
Kind regards,
