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The labour account for Primrose Co for April 20X6 is show below
Dr_______________________Labour A/c___________________________Cr
Bank 105,000 ||. Work in progress. 55,400
Control a/c
I Production ooverhead 49600
. . Control a/c
. . 105000. 105000When direct labour work over time they are paid a basic rate of $10 per hour and an overtime premium of $5 per hour. The time sheet for April 20X6 show that 30 hours of overtime was worked by direct labour due to shortage of direct labour.
What is the cost of direct labour excluding over time work in April 20X6?
$49300
$54950
$49150
$55100I am not getting what is the answer if you can explain then it will be very helpful.
Answer is $55100
Work in progress is Total Direct labor cost that is $55400. We have to exclude overtime work from it .. that is 30 hours are overtime and $10 is basic rate.
30 × 10 = 300
Total direct labor excluding overtime will be = $ 55400 – 300
$ 55100Thankyou one more thing if wip is total direct labour cost then what is bank and production overhead in labour a/c
tariqzeesha: Please do not answer questions in this forum, because it is the Ask the Tutor Forum (but please do help people in the other Paper MA Forum 🙂 )
Sagam: ‘bank’ is the total paid from the back for wages. The 49,600 production overhead is the amount removed from the labour account and transferred to overheads because it is indirect labour.
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