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Labour variance and idle time

This topic has 2 replies, 2 voices, and was last updated 1 year ago by Dany@3081.

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March 1, 2021 at 10:34 am #612302
Dany@3081
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Should idle time be considered when calculating labour efficiency variance?
March 1, 2021 at 2:55 pm #612356
John Moffat
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Yes, in the sense that the standard hours are the standard hours worked (after idle time).
If we are told the standard rate of pay then we need to calculate the standard cost per working hour to use for the calculation of the efficiency variances.
I explain how in my free lectures on idle time variances.
March 2, 2021 at 3:38 pm #612708
Dany@3081
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Thank you so much! I would really like to express my gratitude toward open tuition and your help.
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