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kindly clarify: Last month a compay’s direct workers were paid $40 000 and a total of $12 000 for overtime. Overtime hrs which were required due to the general shortage of labour were paid a time and half . What was the total direct labour cost for the month?
My answer was: 40 000
Premuin o/t 4000 (12000/1.5 =8000 therefore; 12 000-8000 =4000)ANSWER $44 000. Is this correct
No it is not correct. (But why are you attempting questions for which you do not have an answer – you should be using a Revision Kit from one of the ACCA approved publishers. They have answers and explanations.)
The overtime hours are $8,000 at basic rate plus $4,000 premium for the overtime.
Therefore the direct labour is 40,000 + 8,000 = $48,000 (and the indirect labour is the premium of $4,000).
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