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Idle time

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Idle time

  • This topic has 3 replies, 2 voices, and was last updated 2 months ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
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    Posts
  • March 14, 2025 at 11:30 am #716168
    Hinthu
    Participant
    • Topics: 25
    • Replies: 26
    • ☆☆

    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.

    March 15, 2025 at 8:49 am #716175
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54671
    • ☆☆☆☆☆

    Because they will still be getting paid even though they are idle hours.

    March 17, 2025 at 1:02 am #716198
    Hinthu
    Participant
    • Topics: 25
    • Replies: 26
    • ☆☆

    Thank you

    March 17, 2025 at 7:04 am #716204
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54671
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
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