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If the idle time is less than expected, it will reduce loss for the company in terms of profit. But it’s still adverse right?
Not at all right!!!
In basic (Paper MA) variance analysis, idle time is not built into the standard cost and the idle time variance is always adverse (as I explain in my lectures on basic variances).
If idle time has been incorporated into the standard costings, then if the actual % of time idle is greater than the budgeted %, the idle time variance is adverse. If the actual % is less than the budgeted % then the idle time variance is favourable (as explained in my lectures on advanced variances).
I do get the impression that you are not watching our free lectures, and if you cannot be bothered to watch them then you really cannot expect me to be bothered to answer your questions.
No I do watch your videos. They are extremely helpful for me. It’s just that I forget stuffs too soon.
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