- This topic has 3 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
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
Overtime 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.I 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
1. 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.
- You must be logged in to reply to this topic.