Calculation process of cost of idle time
Describe the calculation process of cost of idle time?
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- If the idle time payment is controllable and normal: it must be categories as overheads - If the idle time payment is uncontrollable and normal: the labor rates must be suitably modified - If the idle time payment is uncontrollable and abnormal: it must be considered as a part of manufacturing cost however must be written off to loss account and costing profit.
Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax 40% Firm is proposing to buy the new plant that could generate extra annual profit of Rs. 10,000. The fixed cost of new plant is expected to Rs. 4000. New plant would increase sales volume by Rs. 40,00
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