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- August 17, 2016 at 8:32 pm #333821
Lastly – There is this question in BPP which I cannot understand
Jaffa Co employs two types of labour: skilled workers(direct labour) and semi skilled workers(indirect labour). Skilled labours are paid $ 10 per hour and semi skilled are paid $ 5 per hour.Skilled labour works 20 hours overtime, 12 on specific order and 8 on general
Overtme is paid at time and quarter.Semi skilled worked 30 hours overtime, 20 for specific and rest is geneta. Overtime is paid at time quarter
ANSWER- SIr, while calculating the skilled labour they do
Speicifc overtime = 12x10x1.25=150
What I do not understand is the division of general overtime as they do it like this
General ( 8x10x1) = 80 ( treated as direct, WHYYY)
General (8x10x0.25)=20 ( treated as indirect, WHY)I cant undertand how they divided the 1.25 and how they get it
and why is sone as general
THANKS A LOT
August 18, 2016 at 6:18 am #333871Overtime is paid at time and a quarter, which means that for every hour of overtime they are paid the basic pay (which for skilled is $10) plus an overtime premium of 1/4 i.e. 25% (which for skilled is $2.50). So they will be paid a total of $12.50 an hour.
The basis $10 per hour is always a direct cost.
The overtime premium is $2.50 is an indirect cost when it is general overtime, but it a direct cost if it is on a specific order at the customers request.August 18, 2016 at 4:11 pm #333824I am having problems with accounting to the labour
Firstly-
When the say 601 units-650 units – is it actually 49 units or 50 units ( a very sill question but just wanted to be sure)Secondly- I am super confused with overtime payment and overtime preimium and when is what a direct labour cost . In some questions they say that the overtime payments for direct labour is a direct cost
Thirdly- What is this time and quarter and how do we calculate the direct wages with that
August 22, 2016 at 5:37 am #3344311. 601 to 650 is 50 units in total. (Just like 601 to 602 is actually 2 units).
2. I have answered this in my previous reply – the overtime premium is an indirect cost when it is general overtime, but is a direct cost if it is on a specific order at the customers request.
3. Again I have answered this in my previous reply.
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