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.
Required
a) What are the total direct labour costs for the week?
b) What are the total indirect labour cost for the week?
Thanks
Ask the Tutor ACCA MA
Labour costing
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 :-) )
Ah ok...thanks :)
You are welcome :-)
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