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A company employs 100 direct workers in the factory, who are paid a basic rate of $5 per hour for a 35 hour week. In addition to working their normal hours last month, each worker was asked to work an additional 5 hours overtime per week to meet general production requirements. All overtime hours are paid at time and a half. As a result of some faulty material, 150 hours of direct labour time were registered as idle. What is the indirect labour cost for last month, assuming a 4 week period? *
A $750
B $2,000
C $5,750
D $15,750Again, please do not type out full questions and expect to be provided with a full answer. You must have an answer in the same book in which you found the question and so ask about whatever it is in the answer that you are not clear about.
As I explain in my free lectures on accounting for labour, for direct factory workers the indirect costs are any general overtime premiums (here $2.50 per hour of overtime) and any idle time.
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