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A company employs two types of labors: skilled worker, considered to be direct workers, and
semi- skilled workers considered to be indirect workers.Skilled workers are paid Rs. 700 per hour and semi-skilled Rs. 500 per hour.
The skilled workers have worked 30 hours overtime this week, 20 hours on specific orders
and 10 hours on general overtime. Overtime is paid at a rate of time and a quarter.The semi – skilled workers have worked 45 hours overtime, 25 hours for a specific order
at a customer’s request and the rest for general purposes. Overtime again is paid at time
and a quarter.Calculate the total overtime pay considered to be a direct cost for this week
Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – it has answers and explanations.
Everything paid to the semi-skilled workers (including overtime) is an indirect cost (because the question says that they are indirect workers).
As far as the direct workers are concerned, only the overtime paid for work on the specific order is treated as a direct cost.
I do explain this in my free lectures. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
No it is not.
The answer is 20 x 700 x 1.25
Again, have you watched my free lectures on accounting for labour?
(and why are you attempting questions for which you do not have an answer?)
If you click on ‘ACCA’ in the top bar, and then choose ‘MA’ from the new bar that appears, you will get a page with links to all of our free resources.
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