measure the idle time variance, Cost Accounting

PH plc operates a modern factory that changes chemicals into fertilizer. Due to the the demand for  its product  is  seasonal,  the  company expects  that  there will be an average  level of  idle time equal to 20% of hours paid. This is incorporated into the companyís standard costs, and  the  standard  labour  rate  of  Rs.6.00  per  hour  paid  is  then  adjusted  accordingly.  Any difference among  the expected and  the original amount of  idle  time  is  reported as  the  ëidle time varianceí and is valued adjusted wage rate. 


(a)  Measure the idle time variance and the efficiency variance for April.

(b)  (i) Using the data provided and your answer to (a) above as appropriate, prepare a percentage variance chart that determine the trend of these variances. (Use graph paper and show both variances on the similar chart.)

(c)  Explain shortly the factors that should be considered before deciding to investigate a variance. 



Posted Date: 3/18/2013 6:29:22 AM | Location : United States

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