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- This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.
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- October 6, 2018 at 9:34 pm #476652
Hi,
There is a question in the BPP interactive text book at page 197. It says a company employs skilled workers( direct workers) and semi-skilled workers(considered indirect workers). Skilled workers are paid at £10/h and semi-skilled workers at £5/h. The skilled workers have worked 20h overtime ( 12h specifically on a job, 8h general overtime); the semi-skilled workers have worked 30h overtime( 20h specifically on a job, 10h on general overtime). Overtime is paid at a time and quarter for all.
What would be the total overtime pay considered to be direct cost?And the answer in the book take into consideration the work of the indirect workers too, but i do not understand why? Indirect workers are indirect cost and their overtime would also be indirect cost isn’t it? They have calculated 20h x £5 x 1.25 for the specific overtime and they’ve considered it direct cost. Do you mind if you can please advise why the specific overtime for indirect workers is a direct cost? Many thanks in advance. Roxana.
October 7, 2018 at 9:41 am #476694The question is actually not a very good question, but it is because the overtime was for a specific job and so it is a direct cost of this job.
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