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y plc produces widgets.
each widget should take 0.5 hours to make. The standard rate of pay is $10 per hour. idle time is expected to be 5% of hours paid.they actually produce 10,800 units. they pay $50,000 for 6000 hours, of which 330 hours are idle.
kindly assist.
how is it $316(A)I do suggest that you watch our free lecture on advanced idle time variances!!!
(Our lectures are a complete course for Paper F5 and cover everything you need to be able to pass the exam well)
Standard idle time = 5% x 6,000 hours = 300 hours.
Actual idle time = 330 hours.
Therefore there is excess idle time of 30 hours.The standard rate of pay is $10 per hour, however because only 95% of the time is the standard work then the standard work rate is 10/0.95 = $10.53 per hour
So the excess idle time variance = 30 x 10.53 = $316 adverse.
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