Idle time
Idle time is paid hours in which employees produce nothing, caused by machine breakdowns, material shortages or scheduling gaps. Normal idle time is charged to production overhead, not to a specific job.
What it is
See it move
A machinist is paid €16 an hour for a 40-hour week, a wage cost of €640. Of those 40 hours, 34 were spent producing and 6 were idle while waiting for a delayed material delivery. The idle time costs 6 × €16, or €96, charged to production overhead since the delay is a normal, expected event.
The formula
Variables
- Cost of idle time (€)
- Idle hours (hours)
- Hourly wage rate (€/hour)
Values the paid time lost to idleness, which is charged to production overhead when the idle time is a normal feature of operations.
Check yourself
An assembly worker is paid €18 per hour for a 38-hour week. A machine fault caused 5 hours of idle time during the week, which is a normal, expected part of running the line. What is the cost of the idle time, and where should it be charged?