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Hi all,
In the BPP Practice& Revision Kit page68, question 16.9, it counts the idle time labour cost
as part of the Direct Labour cost Budget, but I thought Idle time labour cost is considered
as indirect labour cost? It would be much appreciated if someone could explain this.
What makes the lab-our cost
1 Labour Hours themselves
2 The rate at which the hours are paid.
3 The hours expected that our employees wont be doing work (idle time)According to the question The standard or budget says it takes 6 hrs to make to make a unit however 20% idle time.What this means is you as Management Accountant preparing a budget u know getting the product done will take employees 6 hrs however u know your employee will be probably chatting discussing their issues such that 6 hr job will end up taking 6 hrs +iddle time.As this is normal that means you have to pay them for the 6 hrs +idle time.
Note iddle time is not 20% of 6 .It is number hours that if we remove 20% we he get 6hrs
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