- This topic has 8 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
Hi again Mr.John
I have a question about overtime premium(which is related with direct cost, specific job)
For ex; Bill is paid 7.5$/hour and plus overtime premium 2,5$/hours over 40 hours in a week. Bill also is paid 50% bonus for assembles box which each takes 30 minutes. and last week he worked 54 hours, 4 of them was related with machine breakdown. Ok.direct cost will be 54-4 hours x 7.5$= 375
overtime 14 hours x 10$ =140 $ is that correct?
other Indirect cost I know. therefore didn’t write them. If overtime is not related with specific job overtime premium will be 14 hours x 2,5= 35$ I understood this. but if it is related with specific cost and is that above answer correct? ( I mean 140$)Sir, I have one more question.
for ex: total hours 7500 then we calculate and find that Basic time is only 6000 hours and 200 hours of them are idle hours.4$/hour for standard hours and 1,5$/hour for overtime.Total hours- Basic time= overtime time which gives us is an indirect cost equal 1500 hours (I think it is correct) then we need find total direct and indirect cost separately
Total hours=productive hours+ idle hours 7500=x+200 x=7300 x 4$=29200$(Total Direct)
Indirect cost (200×4$)+(1500 x 1.5$)=3050$I don’t understand calculation of overtime. if overtime is an indirect cost and we found it 1500hours. why didn’t we deduct it from total hours when calculating direct cost?
I mean 7000-200-1500=5300 hours x 4 $/ why we didn’t do it like that? because overtime gave us like an indirect cost.
Thanks for attentionFirst question:
The 4 hours for the machine breakdown are an indirect cost (idle time).
For the remaining 50 hours, the standard rate of $7.50 is a direct cost.
The 10 hours of overtime are at a premium of $2.50, and this premium is an indirect cost unless it was on a specific job at the customers request in which case it is a direct cost.(you have written 14 hours at $10, but you have already included them in the 54 hours at $7.50 – it is only the extra 2.50 that is the concern.)
Second question:
It is only the overtime premium that is the indirect cost. The standard rate of $4 is a direct cost for all of the hours worked – whether the basic time or the overtime hours.
According first question,in the book they took 14 hours of overtime and multiple it 2.5. but you mentioned only 10 hours for overtime.??? Second question is clear 🙂
If overtime is paid for specific job. Total Direct costs will be 50 x 7,5=375$ and 14 x 2,5=35$ 375+35=410$ is that correct?
- You must be logged in to reply to this topic.