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Idle time question from F5 revision mock exam

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Idle time question from F5 revision mock exam

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by cuevas.
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    Posts
  • November 29, 2015 at 10:00 pm #286227
    cuevas
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    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)

    November 30, 2015 at 7:10 am #286296
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51560
    • ☆☆☆☆☆

    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.

    November 30, 2015 at 7:52 pm #286538
    cuevas
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    John, thank you for your prompt reply with the explanation and your further advice,
    Every blessing! Cuevas

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