Idle Time = Total Time spent by a worker – Actual Time spent on production.

The idle time is classified into two types:

(i) Normal idle time, and

(ii) Abnormal idle time.

Causes of Normal Idle Time:

A part of idle time is unavoidable and is considered as a normal
occurrence in the factory.

Illustrative list is given below:

(1) Travelling time from one job or department to another,

(2) The distance covered between the factory gate and actual place
of work,

(3) Elapse of time between finishing one job and starting another
job,

(4) Time spent to overcome fatigue,

(5) Tea and lunch breaks, and

(6) Machine or job setting-up time etc.

Causes of Abnormal Idle Time:
The important causes for the abnormal time are given
below:
(a) Temporary lack of work,

(b) Machine breakdown,

(c) Power failures,

(d) Shortage of raw materials,

(e) Waiting for tools,

(f) Waiting for jobs due to unplanned production,

(g) Stoppage of work due to managerial policy decisions,

(h) Strikes and lockouts, and

(i) Floods, earthquakes, etc.

Accounting Treatment of Idle Time:

Normal Idle Time:
The wages paid for the normal idle time period is treated as
production overhead and absorbed into cost of product by
adopting an absorption rate. The normal idle time in tool setting
etc. can be charged at inflated rate. Jobs are charged at inflated
rate.

Abnormal Idle Time:

The wages paid for the abnormal idle time can be avoided by
taking proper care and caution. It is not treated as part of cost and
excluded from cost accounts and it is straight away debited to
Costing Profit and Loss Account.

The reasons for the idle time are to be analyzed and the
management needs to know the reasons for avoidable idle time so
that correction can be formulated to reduce and minimize the idle
time.