EXPLAIN the meaning of Idle time and SHOW the treatment for the following causes of Idle time. Causes Treatment 1. The time lost between factory…

Idle Time - The time during which no production is carried-out because the worker remains idle but are paid. In other words, it is the difference between the time paid and the time booked. Idle time can be normal or abnormal. The time for which employees are paid includes holidays, paid leaves, allowable rest or off time etc. Causes Treatment 1. The time lost between factory gate and the place of work, It is treated as a part of cost of production. Thus, in the case of direct workers an allowance for normal idle time is considered setting of standard hours or standard rate. In case of indirect workers, normal idle time is considered for the computation of overhead rate. 2. The interval between one job and another, 3. Idle time may also arise due to abnormal factors like lack of coordination Abnormal idle time cost is not included as a part of production cost and is shown as a separate item in the Costing Profit and Loss Account. 4. Power failure, Breakdown of machines