- This topic has 0 replies, 1 voice, and was last updated 4 hours ago by .
Viewing 1 post (of 1 total)
Viewing 1 post (of 1 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Idle time
A company operates a factory which employed 40 direct workers throughout the four-week period just ended. Direct employees were paid at a basic rate of $4.00 per hour for a 38-hour week. Total hours of the direct workers in the four-week period were 6,528. Overtime, which is paid at a premium of 35%, is worked in order to meet general production requirements. Employee deductions total 30% of gross wages. 188 hours of direct workers’ time were registered as idle.
Calculate the direct and indirect costs for the four-week period just ended. Calculate:
Direct labour cost
Indirect labour cost
In the given answer, overtime is calculated as: Total time – basic time.
Since there is also idle time, why the overtime is not calculated as follows: Total time- basic time- idle time.