DESCRIBE briefly idle time and explain the treatment of idle time in cost accounts in following situations: (i) The setting up time for the machine…

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. Situation Idle Time Treatment The setting up time for the machine in case of Direct Worker Mr. A Normal idle time It is treated as a part of cost of production. It is to be considered while setting of standard hours or standard rate. Normal rest time, break time for lunch in case of Indirect Worker Mr. B Normal idle time It is to be considered for the computation of overhead rate. Time lost due to break-down of machines in case of Worker Mr. C Abnormal idle time It is to be shown as a separate item in the Costing Profit and Loss Account.