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What is Idle Time in Cost Accounting

idle time

In cost accounting, idle time is when a production resource is available but not used. Idle time can occur for several reasons, such as when a production line is shut down for maintenance or when there is a shortage of raw materials.

In many factories, idle time is a major source of inefficiency and wasted resources. When idle time is not properly managed, it can lead to significant increases in the cost of production.

How to Minimise Idle Time?

There are some ways to manage and reduce idle time. One common approach is to use work order sequencing to ensure that production resources are used as efficiently as possible. Work order sequencing is a process of organising and scheduling work orders to minimise the amount of time that production resources are idle.

Another approach to reducing idle time is to implement just-in-time production. In just-in-time production, raw materials and components are only delivered to the production line as needed. This approach eliminates the need for inventory storage and reduces the risk of production delays due to shortages of materials.

Idle time can also be reduced by improving communication and coordination between different parts of the production process. For example, installing a real-time monitoring system can help to identify bottlenecks and other issues that cause production delays.

Improving the management of idle time is an important part of reducing the cost of production. By reducing idle time, factories can become more efficient and productive.

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