Each widget should take 0.5 hrs to make. Std pay rate 10/hr. Idle time expected to be 5% of hours paid. Actual production 10800. Paid $ 50000 for 6000 hrs of which 330 are idle. What's the excess idle time variance?
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11y ago#1The standard idle time is 5% x 6000 = 300.
The actual time is 330 hours, so the excess idle time is 30 hours.
The rate per working hour is $10/0.95 = $10.53
So the excess idle time variance is 30 x $10.53 = $316
(You might find the free lecture on this to be useful)
From where did 10.53 came? why divide 10 by 0.95?
11y ago#3For every hour paid, we only get 0.95 hours of work.
So every 0.95 working hours cost $10
So ever 1 working hour costs 10/0.95
(It will help you to watch the free lecture on this)
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