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Jaffa Co employs two skilled workers, considered to be direct workers and semi-skilled workers considered to be indirect worker. skilled workers are paid $10 per hour and semi skilled $5 per hour.
The skilled workers have worked 20 hours overtime, 12 hours on specific orders and 8 hours on general overtime.overtime is paid at a rate of a 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.
my working are;
Skilled workers Direct cost indirect cost
specific overtime 12*10*1.25 150
General overtime 8*10*1 80
premium 8* 10*0.25 20Semi skilled workers
specific overtime 20*5*1.25 125
General overtime 10*5* 1 50
premium 10*5*0.25 12.5Total 405 32.5
am I right please?
I don’t know if you have typed out the whole question (actually you can’t have because it doesn’t actually ask anything 🙂 ).
However, on what you have typed, everything paid to the semi-skilled workers is an indirect cost (because the question says they are indirect workers).
For the skilled workers, their basic pay (20 hours at $10 per hour) is a direct cost; the overtime premium on specific orders (12 hours at $2.50 per hour) is also a direct cost; the general overtime premium (8 hours at $2.50 per hour) is an indirect cost.
(In future, if you wish me to answer then please ask in the ask the tutor forum)
How the 20 hours could b basic pay? Question says 20 hours for skilled workers is total overtime where 12 hours is specific n 8 hours is general means premium. N in the semi skilled workers the specific order 20 hours can not b indirect as all the specific order is direct. M I wrong? Plz correct me.thank you
You are wrong!
For skilled workers, 20 hours is overtime, which means that for those 20 hours they are paid $12.50 ($10 x 1.25) per hour.
$10 of it is their basic pay – this is a direct cost. The overtime premium of $2.50 per hour is treated as a direct cost if it is required for a specific job, or treated as an indirect cost if it is just general overtime.
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