Q.Distinguish between Normal Idle Time and Abnormal Idle Time, giving two examples of each, and state how each is treated in the cost accounts.

Normal idle time is unavoidable and absorbed into cost; abnormal idle time is avoidable and charged as a loss.

Normal Idle Time arises from causes inherent to running any factory of the kind concerned — genuinely unavoidable, so its cost is treated as a normal part of production cost. Abnormal Idle Time arises from unusual, avoidable events and represents a real loss, so it is excluded from cost of production and charged directly to the Costing Profit and Loss Account instead.

Normal Idle Time is idle time that is genuinely unavoidable, arising from causes inherent to the normal operation of any factory of the kind concerned. Examples: the short time lost between finishing one job and starting the next (machine resetting/tool-changing time), and tea breaks or the time taken walking from the factory gate to the workstation. Because this idle time cannot realistically be eliminated, its cost is treated as a normal part of production cost — usually absorbed as Factory Overhead, or built into the wage rate charged to jobs via a small upward loading.

Abnormal Idle Time arises from causes that are avoidable, or genuinely abnormal to the factory's routine operation. Examples: a machine breakdown requiring repair, and a power failure/cut stopping production. Because this represents a real inefficiency or loss rather than a routine cost of doing business, its cost is excluded from the cost of production altogether and instead charged directly to the Costing Profit and Loss Account as a loss for the period.

A common error is charging Abnormal Idle Time cost to the job/Factory Overhead just like Normal Idle Time — this is wrong precisely because abnormal idle time is a loss that should NOT inflate the cost of production; it must go to the Costing P&L Account so that genuine production cost is not distorted by an unusual, one-off event.