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Sir can you please explain how to do this question.
Company x employs two types of labour: skilled workers considered to be direct workers and semi-skilled workers considered to be indirect workers. Skilled workers are paid $10 per hour and semi-skilled $7.50 per hour. All employees work a standard 35 hour week. There are 7 skilled workers and 4 semi-skilled workers. The skilled workers have worked 50 hours of overtime this week, 20 hours on a specific order and 30 hours on general production. The semi-skilled workers have worked 20 hours of overtime, 10 hours on a specific order at a customer’s request and the remaining 10 hours to meet general production requirements. All overtime is paid at time and a half.
Requireda) What are the total direct labour costs for the week?
b) What are the total indirect labour cost for the week?Thanks
Direct labour costs are: Basic pay; and overtime premiums (if for a specific job at the customers request)
Indirect labour costs are: General overtime premiums and bonus payments
Hope that helps 🙂
So is this correct
Direct costs
7 workers x 35 hours x $10/hr = $2450 (Skilled workers pay for 35 hours)
20 hours x $5 (time and a half) = $100 (skilled workers specific request OT)
10 hours x $3.75 (time and a half)= $37.5 (semi skilled workers specific request OT)Indirect costs
4 workers x 35 hours x $7.5/hr = $1050 (semi skilled workers pay for 35 hours)
30 hours x $5 (time and a half)= $150 (skilled workers general OT)
10 hours x $3.75 (time and a half)= $37.5 (semi skilled workers general OT)At a quick look, it seems correct
(Sorry saying a quick look, but because exams are next week I am spending 6 or 7 hours a day answering questions 🙂 )
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