CAF-5 · Chapter 11 · Question 9 of 10
During a period, workers were paid for 4,200 total hours, but the actual active production time was only 4,100 hours due to unexpected machine breakdowns. If the standard labour rate is Rs. 100 per hour, what is the idle time variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 10,000 Adverse
Explanation
Idle time variance is calculated by taking the difference between hours paid and hours worked (the idle hours) and multiplying by the standard labour rate. Idle hours = 4,200 paid – 4,100 worked = 100 hours. 100 hours × Rs. 100 = Rs. 10,000. Idle time variance is always an Adverse variance.
More Variance Analysis MCQs
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