Accounting for Labour

Jaffa Co employs two types of labour: skilled workers, considered to be direct workers, and semi-skilled
workers considered to be indirect workers. Skilled workers are paid $10 per hour and semi-skilled $5
per hour.
The skilled workers have worked 20 hours overtime this week, 12 hours on specific orders and 8 hours
on general overtime. Overtime is paid at a rate of time and a quarter.
The semi-skilled workers have worked 30 hours overtime, 20 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.
What would be the total overtime pay considered to be a direct cost for this week?
A $275 C $375
B $355 D $437.50
ANSWER
Direct cost Indirect cost
$ $
Skilled workers
Specific overtime (12 hours*$10*1.25)= 150 Direct Costs
General overtime (8 hours*$10 *1)= 80 Direct Costs
(8 hours*$10*0.25) =20 indirect costs

Dear Sir,why here 8*10$*0.25 is recognized as indirect costs?