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.
*this is an example from bpp text but i just got really confused with the answer . Can someone explain to me ?
1 You haven’t specified a requirement, you have just repeated data. So what is rwquired?
2 If the BPP answer confuses you, at least show what they put so that it can be explained.
I’m sorry i forgot to add the requirement .
They asked to calculate the total overtime pay considered to be direct cost for the week .
This is the answer;
(12 hrs x $10 x1.25)
(8 hrs x $10 x 1)
(8 hrs x $10 x 0.25)
(20 hrs x $5 x 1.25)
(10 hrs x $5 x 1.25)
I understand that Overtime is treated as Direct only when it is specific request from customer or if it is worked regularly by production dept , so i do not have problem with the specific overtime . But i am confused with the calculations of general overtime for both skilled and semi skilled .
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