S1: In standard costing, the 'Idle Time Variance' is always adverse. S2: 'Abnormal Idle Time' is treated as a cost of the period and transferred to the Costing P&L. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: In standard costing, the 'Idle Time Variance' is always adverse. S2: 'Abnormal Idle Time' is treated as a cost of the period and transferred to the Costing P&L. Which statement(s) is/are correct?
A. S2 only
B. Both S1 and S2
C. S1 only
D. Neither S1 nor S2
Answer: Option B
Solution (By JKSSB Mock Tests)
Idle time represents unproductive time, so the variance is always adverse (actual > standard). Normal idle time is absorbed in overheads, but abnormal idle time (due to strikes, accidents) is treated as a period cost and charged to the Costing P&L. Both are correct.
Explanation:
In the imprest system, the chief cashier reimburses the petty cashier the exact amount disbursed so the float returns to its original fixed amount.
Explanation:
Capital expenditure yields benefits over multiple future periods (hence an asset), making Reason R false. R describes revenue expenditure.
No comments yet. Be the first to start the discussion!