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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Mock exam Q
Hello Sir,
I could not do the following Q from mock exam,
Y PLC produce Widgets
Each Widget should take .5 HR to make,
std rate is $ 10.00 /Hr ,
idle time is expected to be 5% of Hrs paid
they actually produced 10800 units
The paid $ 50000 for 6000 hrs of which 330 hrs are idle
what is the excess idle time variance ?
Thanks Sir,
Have you watched the free lecture on excess idle time variances? If not, then I do suggest that you do.
The expected idle time is 5% x 6,000 = 300 hours.
The actual idle time is 330 hours.
Therefore there are 30 hours excess.
These are costed at the standard rate per working hour.
The standard rate of pay is $10 per hour, but they are only actually expected to work for 0.95 hours.
Therefore the standard work rate is 10/0.95 = 10.5263
So the variance = 30 x 10.5263 = $316 adverse