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Revision mock Q Idle Time Variance

This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.

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November 20, 2014 at 6:52 pm #211719
Adam
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Y lc produces widgets.
Each widget takes 0.5 hrs to make.Std rte of pay $10/hr. Idle time expected 5% of hrs paid
They actually produce 10,800 units. They $50,000 for 6000 hrs, of which 330 hrs are idle.
Calculates excess idle time variance?
November 21, 2014 at 12:11 pm #211861
John Moffat
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The actual idle time is 330 hours; the standard idle time is 5% x 6000 hours = 300 hours.
so the excess idle is 30 hours.
The standard cost per working hour is 10/0.95 = $10.53.
So the excess idle time variance is 30 x $10.53 = $316
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