Management Accounting · Variance calculations and analysis

Idle Time Variance: Formula and Method for ACCA MA

Updated 11 October 2026 · Fact-checked

Idle time variance shows the cost of hours you paid for but workers did not work. Calculate it as (hours paid − hours worked) × standard rate per hour. It is always adverse. When it is recorded, the efficiency variance uses hours worked, not hours paid.

Understand Idle Time Variance

Standard costing assumes you pay labour for the hours it works. In practice, you sometimes pay for hours when no work is done. Machines break down. Materials arrive late. Orders run out. Workers are paid, but they sit idle.

If you ignore this, the labour efficiency variance gets distorted. It would mix two different problems: workers being slow, and workers being paid for time they did not work at all. Management needs these separated, because the causes and the people responsible differ.

So you split the hours. Hours paid is what the payroll records. Hours worked (active hours) is paid hours minus idle hours. The idle time variance values the idle hours. The efficiency variance then compares the hours worked with the standard hours allowed for the actual output.

The labour rate variance still uses hours paid, because you pay the actual rate on every paid hour. The three variances together explain the whole total labour variance.

Idle time is a loss with no benefit, so the variance is always adverse. If a question says there is no idle time, you simply have no idle time variance.

Key formulas to remember

Idle time variance: (Hours paid − Hours worked) × Standard rate per hour; Always adverse. Uses the standard rate, not the actual rate.
Labour rate variance (with idle time): (Hours paid × Standard rate) − Actual cost of hours paid; Based on hours paid. Positive is favourable, negative is adverse.
Labour efficiency variance (with idle time): (Standard hours for actual output − Hours worked) × Standard rate per hour; Based on hours worked, not hours paid.
Total labour variance check: (Standard hours for actual output × Standard rate) − Actual cost of hours paid = Rate + Idle time + Efficiency; Use it to check your three answers. Mind the signs.
Standard hours for actual output: Actual units produced × Standard hours per unit; Flex to actual output, not budgeted output.

How to solve Idle Time Variance questions

Use this method for any labour variance question that mentions idle time, hours paid or downtime.

1Write down the hours paid, hours worked (or idle hours), actual labour cost, actual output and the standard rate and hours per unit.
2If only idle hours are given, work out hours worked = hours paid − idle hours.
3Calculate standard hours for actual output = actual units × standard hours per unit.
4Calculate the idle time variance = idle hours × standard rate. Label it adverse.
5Calculate the rate variance: hours paid × standard rate, minus actual cost. Label it A or F.
6Calculate the efficiency variance: (standard hours − hours worked) × standard rate. Label it A or F.
7Check that rate + idle time + efficiency equals the total labour variance. Then answer the question asked.

Quickest way: Three-line labour variance table

When to use it: Use it when a number entry or multiple choice question gives hours paid, hours worked and an actual cost.

Line 1: Actual cost of hours paid. Line 2: Hours paid × standard rate. Line 3: Hours worked × standard rate.
Line 4: Standard hours for actual output × standard rate.
Line 1 to line 2 gives the rate variance. Line 2 to line 3 gives the idle time variance. Line 3 to line 4 gives the efficiency variance.
Higher cost in the earlier line than the later one means adverse for rate; idle is always adverse; for efficiency, line 3 above line 4 means adverse.

Common mistakes in Idle Time Variance

Using the actual rate to value idle time.
Students link idle time to what was actually paid.
Fix: Variances in hours use the standard rate. Idle time variance = idle hours × standard rate.
Calculating efficiency on hours paid.
Students use the same hours as the rate variance and forget the split.
Fix: When idle time is given, use hours worked for efficiency. Hours paid is only for rate and idle time.
Calling idle time variance favourable.
Students confuse the sign when hours worked are lower than hours paid.
Fix: Idle hours are paid with no output, so it is always adverse.
Using budgeted output for standard hours.
Students pick the first output number in the question.
Fix: Use actual units produced × standard hours per unit.
Ignoring idle time when the rate variance is calculated.
Students think idle hours are not paid.
Fix: Idle hours are paid. Rate variance covers all hours paid.

Worked examples

Example 1

A company's standard labour cost is $12 per hour. Each unit takes 3 standard hours. In a month, 1,000 units were made. Workers were paid for 3,200 hours, of which 150 hours were idle. Actual labour cost was $40,000. Calculate the idle time variance.

Show the solution

Idle hours = 150.
Standard rate = $12 per hour.
Idle time variance = 150 × $12 = $1,800.

Answer: $1,800 adverse

Example 2

Using the same data, calculate the labour rate variance and the labour efficiency variance.

Show the solution

Hours paid = 3,200. Hours worked = 3,200 − 150 = 3,050.
Standard hours for actual output = 1,000 × 3 = 3,000.
Rate variance: 3,200 × $12 = $38,400. Actual cost = $40,000. Difference = $1,600 adverse.
Efficiency variance: (3,000 − 3,050) × $12 = −50 × $12 = $600 adverse.
Check: standard cost 3,000 × $12 = $36,000. Actual cost $40,000. Total variance = $4,000 adverse.
Rate $1,600 + idle $1,800 + efficiency $600 = $4,000 adverse. This agrees.

Answer: Rate variance $1,600 adverse; efficiency variance $600 adverse

Exam tips

Look for words such as downtime, breakdown, hours paid or idle. They signal that you must split the hours.
In multiple response questions, an idle time variance is never favourable. Remove any option that says so.
Check your three variances add to the total labour variance. It takes seconds and catches most errors.
For number entry, give the figure asked for, in the stated unit, and follow any instruction on rounding. Read whether the question wants the sign shown.

Practice questions from Variance calculations and analysis

Idle Time Variance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Idle Time Variance: frequently asked questions

What is the idle time variance formula in ACCA MA?

It is (hours paid − hours worked) × standard rate per hour. The result is always adverse. It is a separate part of the total labour variance.

Why does idle time change the efficiency variance?

Efficiency should measure how well people worked while they were working. So it uses hours worked. Idle hours are taken out and shown in their own variance.

Which hours does the labour rate variance use when there is idle time?

It uses hours paid. You pay the actual rate on every paid hour, including idle hours. Compare the cost of those hours at the standard rate with the actual cost.

Can idle time variance be favourable?

No. It represents paid hours with no work done, so it is always adverse. If there is no idle time, there is no idle time variance.