In a factory, a worker is paid 200 per day as basic pay, along with a Dearness Allowance (D.A.) of 120% of the basic pay, for working 6 days a week,…
CA Intermediate · Cost and Management Accounting · MTP · September 2025
In a factory, a worker is paid 200 per day as basic pay, along with a Dearness Allowance (D.A.) of 120% of the basic pay, for working 6 days a week, 8 hours each day. He is allowed a 25 minutes lunch break and a 15 minutes tea break during his shift. Throughout the week, his time card recorded a total of 13 hours charged to Job A, 12 hours to Job B, and 15 hours to Job C. These hours reflect the time spent on each specific task during the workweek. The time that was not assigned to specific jobs was considered abnormal idle time, as it was spent waiting for the next job to become available. This waiting time, which wasn't booked to any particular job, represents lost time that could have been used more efficiently if there had been a continuous flow of work. CALCULATE the amount of wages to be allocated to different jobs and STATE the treatment of abnormal idle time.
Suggested Answer and Working Notes:
Correct Answer: Option (C)
Job A -780, Job B -720, Job C-900 and wages paid for Abnormal idle time -240 to be charged to Costing Profit & Loss A/c.
Topics: Employee Cost & Direct Expenses, Cost Accounting Systems
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