CA Inter P4 · Chapter 3 · Question 8 of 11
Idle time caused by a prolonged strike in the factory should be treated as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A charge to the Costing Profit and Loss Account
Explanation
A prolonged strike is an abnormal cause of idle time. Abnormal idle time cost is not included in the cost of production; it is transferred to the Costing Profit and Loss Account. Normal idle time (for example time taken to move between jobs) is absorbed through the employee cost rate or factory overheads.
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