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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 unitsThe 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 = 10.5263So the variance = 30 x 10.5263 = $316 adverse
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