CIMAPRA17-BA2-1 Exam - Topic 1 Question 74 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 74
Topic #: 1

The standard labour hours for all products manufactured by a company include an allowance for idle time. Idle time is budgeted to be 5% of total hours worked. Each unit of product G requires an input of 9.5 active labour hours. The labour rate is $12 per hour.

The standard labour cost shown on the standard cost card for one unit of product G will be

A$10.00

B$114.00

C$119.70

D$120.00

Show Suggested Answer

Suggested Answer: B

by Lai at Jul 05, 2024, 07:06 AM

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Tamar

9 months ago

Really? I thought it would be lower than that!

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Sanjuana

10 months ago

No way, it's definitely not $120!

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Helene

10 months ago

I think the answer is C, $119.70.

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Junita

10 months ago

Wait, does that include idle time?

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Novella

10 months ago

The active hours for product G are 9.5.

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Daron

10 months ago

I think the total hours worked should be 9.5 hours plus the 5% idle time. I just can't recall the exact calculation method we used.

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Art

11 months ago

I feel like I might be overthinking this. Was the idle time included in the total hours or just the active hours?

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Crista

11 months ago

This question seems similar to the practice problems we did on labour costs. I think I need to multiply the active hours by the rate, then add the idle time.

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Barrie

11 months ago

I remember we calculated standard costs in class, but I'm not sure how to factor in the idle time here.

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Socorro

11 months ago

Okay, I think I've got it now. The key is remembering to account for the 5% idle time allowance when calculating the total labor hours per unit. Once we have the total hours, it's just a simple multiplication by the labor rate to get the standard labor cost. I feel confident I can tackle this type of question on the exam.

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Sabrina

11 months ago

No problem, I've got this. The question states that the active labor hours per unit is 9.5, and the idle time allowance is 5% of the total hours worked. So we just need to calculate the total hours worked, which will be 9.5 / 0.95 = 10 hours. Then multiply that by the $12 labor rate to get the standard labor cost of $120 per unit.

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Glory

11 months ago

I'm a bit confused about the idle time allowance. Do we need to factor that in when calculating the total labor hours per unit? And how exactly does that affect the standard labor cost?

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Amber

11 months ago

Hmm, this seems straightforward enough. We just need to calculate the total labor hours per unit, including the 5% idle time allowance, and then multiply that by the labor rate. I think I can handle this.

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Broderick

11 months ago

Okay, let's think this through step-by-step. We need to find the standard labor cost for one unit of product G, and the question gives us the key information we need - the active labor hours per unit, the labor rate, and the idle time allowance.

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Tequila

11 months ago

I'm not entirely confident about this, but I think the main thing is whether the package creator can modify the installed components or not. I'll go with B and C just to be safe.

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Glory

11 months ago

I think the private cloud with Platform as a Service is the way to go here. It gives the development team the control they need over their environment, while still allowing multiple companies to access and integrate the application.

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