# Idle Time
## Concept
Idle Time = the time during which the worker is not working but is still being paid.
It represents the gap between hours paid for and hours actually utilised on production.
## Classification of Idle Time
### Normal Idle Time
Unavoidable and inherent in any working condition. Examples:
- Normal rest / lunch / washroom breaks
- Setting up of machines
- Travel time from factory gate to workplace
- Time between shift changes
### Abnormal Idle Time
Avoidable; caused by unusual or one-off events. Examples:
- Non-availability of material
- Fire / flood / power failure
- Breakdown of machine
- Lockouts, strikes
## Accounting Treatment
| Type | Treatment | Analogy |
|---|---|---|
| Normal Idle Time | Reduce the hours used in cost-per-hour calculation; do NOT reduce the cost. Effectively, the cost is absorbed by the productive hours (rate per hour goes up). | Just like Normal Loss of Material — absorbed by good units |
| Abnormal Idle Time | Reduce both the hours AND the cost. The cost of abnormal idle time is transferred to Costing P&L | Just like Abnormal Loss of Material — written off |
## Effective Working Hours Formula
$$\text{Effective Hours} = \text{Total Hours Paid} - \text{Normal Idle Time} - \text{Abnormal Idle Time}$$
When computing Labour Cost per Hour:
- For Normal idle time → reduce hours in the denominator (cost stays the same → rate per hour increases automatically).
- For Abnormal idle time → reduce the related cost from numerator AND reduce hours from denominator; the removed cost goes to Costing P&L.