• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Job Costing – Question about a worked example

Forums › FIA Forums › MA2 Managing Costs and Finance Forums › Job Costing – Question about a worked example

  • This topic has 0 replies, 1 voice, and was last updated 11 years ago by mansoor.
Viewing 1 post (of 1 total)
  • Author
    Posts
  • April 30, 2014 at 6:19 pm #166927
    mansoor
    Participant
    • Topics: 424
    • Replies: 542
    • ☆☆☆☆

    Job 2409 data on labor hours worked:

    Dept. P 300 hours , of which 100 were overtime
    Dept. Q 200 hours, of which 100 were overtime.

    OT is not normal in Dept. P, where basic pay is 6/hr and OT premium is 1/hr.

    OT in Dept Q was worked upon request of the customer. Basic pay is 8/hr and OT premium is 1.5/hr

    Overheads are absorbed at 3 per direct labor hr in both depts.

    What is the direct labor costs of Job 2409:

    Labor Costs:

    Dept P 300×6 = 1800
    Dept Q 200×8 = 1600

    “OT premium will be charged to the OH in case of Dept P, and to the job of the customer who asked for OT to be worked in the case of Dept Q”

    ———————————–

    my question:

    in case of dept Q, the total direct labor cost wd be 200×8 + 100×1.5, since the customer requested it.

    why does the answer above the dashed line not include the ot premium?

    also, since OT premium for Dept P is an indirect cost, are the following statements correct:

    * in calculation of the full production cost, the rate at which the OH are absorbed, takes care of the OT worked – so we can ignore the ot premium in calculating full production costs

    * generally, indirect costs are not taken at actual for job costs, since the absorption rate is taking care of the overheads.

  • Author
    Posts
Viewing 1 post (of 1 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • nosiphoceliwedlamini@gmail.com on Financial instruments – convertible debentures – ACCA Financial Reporting (FR)
  • NirajNathani99 on PPE – revaluation upwards – ACCA Financial Reporting (FR)
  • AKN1989 on Linear Programming – Maximum contribution – ACCA Performance Management (PM)
  • Motsotase910 on Contingent Assets and Liabilities – ACCA Audit and Assurance (AA)
  • Kim Smith on ACCA F2 Key to success

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in