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Data. Direct Labor. Indirect workers
Total attendendance including overtime
2640hrs. 940hrs
Productive hrs 2515 hrs
Nonproductive he’s
Machine breakdown 85 hrs
Waiting for work 40 hrs
Overtime. 180hrs. 75 hrs
Basic hr rat . E5. E4
Group bonus. E2840. E710
Statutor . E1460 E405
Overtime which is paid at 140% of basic rate, is worked to meet factory requirements. However 40% of overtime he’s of both direct and indirect workers in the month were worked to meet customer needs.
Required:
1) Calculate gross wage of both direct and indirect workers.2)Using the above information, record the relevant entries for the month in the finishing department wages control account and production overhead control account.
Please sir help me. Can’t figure out where I am going wrong. Need assistance please.
Direct labour is the basic pay and any overtime premium paid when it is on a specific job at the customers request.
Indirect labour is general overtime premium, bonus payments, idle time, and time spent on indirect work.
You won’t be asked to record entries in Paper F2.
I assume that you have a printed answer in the same book in which you found the question, and so ask which part of the answer is confusing you.
The answer is not found in the book this question taken from.
Calculating overtime as per direct and indirect labor is my challenge:
1) I wonder if direct labor overtime should be calculate as the excess of working hrs *overtime rate*40% which is worked at customer order+ indirect labor excess* overtime rate*40%
OR
The excess of direct labor hrs*overtime rate.You really are wasting your time if you are attempting questions for which you have no answers. You should use a Revision Kit from one of the ACCA approved publishers – they are full of exam-standard questions, and give answers to all of the questions.
Direct labour overtime is only on the excess of direct labour hours. (Everything paid to indirect workers, whether basic or overtime, is indirect)
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