## What is Idle Time?
Idle time = Time paid to workers − Time actually booked to productive work
Workers are paid but no production occurs during this period. Idle time is a cost — the question is where to charge it.
---
## Types of Idle Time
### 1. Normal Idle Time
Time that cannot be avoided under normal operating conditions.
Causes:
- Walking from factory gate to workstation
- Interval between completing one job and starting the next
- Machine set-up time
- Normal rest breaks (lunch, tea)
Accounting Treatment:
- For direct workers: included in the standard hour rate or standard cost (absorbed into product cost)
- For indirect workers: factored into the overhead absorption rate
- Normal idle time is part of production cost — it is expected and planned for
---
### 2. Abnormal Idle Time
Time lost due to unexpected or avoidable events.
Causes:
- Power failures
- Machine breakdowns
- Shortage of raw materials
- Strikes or lockouts
- Poor supervision
- Fire, flood, or other disasters
Accounting Treatment:
- NOT included in product cost
- Transferred to Costing Profit and Loss Account as a period loss
- Must be further analysed:
- Controllable: idle time management could have prevented (poor scheduling, delayed materials delivery) → management held accountable
- Uncontrollable: beyond management's control (flood, power cuts) → reported separately
---
## Management's Goal
- Short-term: Eliminate controllable abnormal idle time
- Long-term: Even reduce normal idle time through process improvement and better layout
- Continuously analyse causes to improve production efficiency
| Type | Included in Product Cost? | Account Charged |
|---|---|---|
| Normal Idle Time | Yes (via standard rate) | Product / Overhead |
| Abnormal Idle Time | No | Costing P&L Account |