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Total budgeted machine time of 3800 hours(include productive and non productive hours)…
Due to inevitable delays for set-ups, idle time of 10% is allowed… standard variable machine hour is $270… Actual non productive machine hours were 430 hours… Calculate idle time variance…
I want to know if the $270 must be multiplied by 100/90 or not? If not why?
One more question, i know effective idle time rate applies to all variances concerning labour except i’m not sure if it applies to labour rate variance, can you tell me if that applies or the original rate applies?? Its urgent, ans me both please…I would really need to see the whole question.
However what you have written suggests that the budgeted time and standard rate already take account of the idle/unproductive time. If so, then the 270 does not need to me adjusted.
For labour rate you look at the actual hours paid, and the rate of pay.
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