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Labour costing

IImperio11y ago
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
John MoffatJohn MoffatTutor11y ago#1
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 :-)
IImperio11y ago#2
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)
John MoffatJohn MoffatTutor11y ago#3
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 :-) )
IImperio11y ago#4
Ah ok...thanks :)
John MoffatJohn MoffatTutor11y ago#5
You are welcome :-)
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