Question

54. The treatment of idle time in cost includes the following:
(A) Cost of normal and controllable idle time is charged to factory overheads
(B) Cost of normal but uncontrollable idle time is treated as prime cost
(C) Cost of abnormal and uncontrollable idle time is charged to costing profit and loss account
(D) All of the above
circumstances, as:​

Answer 1

(C) Cost of abnormal and uncontrollable idle time is charged to costing profit and loss account

Answer 2

It includes all of the above.

• Inactive time is the useless season of representatives for which they are as yet paid and the costs are charged to the factory overheads.
• In accounting, the expense of such inactive time is incorporated as either direct work or assembling overhead and is important for total item cost.
• Unusual inactive time is brought about by controllable and avoidable elements. The cost of normal but uncontrollable idle time is also treated as prime cost