CAF-5 · Chapter 10 · Question 6 of 10
A worker takes 4 hours of active production time to complete one unit of a product. If normal idle time (for breaks and setup) is expected to be 20% of the total hours paid, what is the standard labour hours that should be charged for one unit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 5.00 hours
Explanation
The active production time represents the productive hours. If idle time is 20% of total time paid, then productive time is 80% of total time paid. 4 hours = 80% of total hours. Total standard hours = 4 hours / 0.80 = 5.00 hours.
More Standard Costing MCQs
- Q8How is the standard fixed overhead absorption rate calculated when deriving the standard cost card of a product?
- Q9When setting a standard cost for direct materials, which of the following factors should the purchasing department normally incorporate…
- Q10If a company introduces a new complex product and expects a 90% learning curve to apply to the workforce, how should this effect be…
- Q1How is a "Standard Cost" fundamentally defined in management accounting?
- Q2Which type of performance standard assumes perfect operating conditions with absolutely no allowance for wastage, inefficiencies, or…