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Idle Time Variance

Idle time means that time in which laborers do not engage in production activity. So, if there is any abnormal idle time, it will increase the cost of production. So, it is very necessary to calculate idle time variance and if there is unfavorable idle time variance, we take the steps to reduce abnormal idle time.

Definition of Idle Time Variance 

Idle time variance is the part of labor variance which happens due to abnormal idle time. We can calculate idle time variance by multiplying standard wage rate with abnormal idle time.

Suppose, abnormal idle time is 50 hours and standard rate of wages per hour is $ 1.50.

Idle Time Variance = 50 hrs X $ 1.50 per hr = $ 75 ( Unfavorable)

Related : Labor Efficiency Variance 

Comments

: 2
  1. Can idle time variance be only adverse?

    ReplyDelete
  2. Why do we take standard wage rate and not the actual wage rate for calculation ?

    ReplyDelete
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Accounting Education: Idle Time Variance
Idle Time Variance
Accounting Education
https://www.svtuition.org/2011/06/idle-time-variance.html
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