What is Idle Time in Cost Accounting?

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Accounting Research Paper Topics

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:04 The Normal Production…
  • 0:29 Idle Time Defined
  • 0:39 Types & Causes of Idle Time
  • 2:03 Idle Time in Cost Accounting
  • 3:10 Reducing Idle Time
  • 3:45 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed Speed

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Ryan Morales
In this lesson, you'll be more acquainted with the concept of idle time, two types of idle time, the accounting treatment of idle time, as well as the causes of and the ways to reduce idle time.

The Normal Production Inefficiencies

Put yourself in the person of a production supervisor of your favorite soda drink. You work an eight-hour shift, but you very well know that actual production doesn't run straight 24/7; there will always be the existence of normal interruptions sometime during the process. There will be set-up time, there will be queue time, and of course, there will be machine breakdowns and employee break periods. Unfortunately, production inefficiencies do exist.

Idle Time Defined

Idle time is the time for which employees are paid, but for which they are not doing actual work. It's basically the unproductive time of employees, for which they're still compensated.

Types & Causes of Idle Time

Idle time can be caused by factors within and beyond the control of management. This leads us to two types of idle time. The first type is normal idle time. Normal idle time is brought about by factors that management cannot control. Such idle time is part of the normal operating cycle. For example, workers in your soda drink factory have to wait while machines are being set up or while there are the usual factory maintenance activities. Factory workers would also have personal breaks and short rest periods in between jobs. Further, there's normal unproductive time resulting from the inherent nature of the company's products. In an assembly line that manufactures products which require painting, for instance, workers of the next department will have to wait while the paint dries before they can advance to the next step in the production process. These causes are really unavoidable, but the goal of management is to shorten these unproductive times as much as possible.

The second type is abnormal idle time. Abnormal idle time is caused by factors which are controllable by management. This unproductive time is unnecessary in the process and often covers an extended period of time. Abnormal, extended unproductive time may be caused by factors such as a workers' strike or lockout, avoidable machine breakdowns, unavailability of raw materials and supplies, extended power failure, etc. These causes are very much avoidable.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support