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Labour costs..

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Labour costs..

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
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  • June 11, 2015 at 11:26 pm #256497
    Abror
    Member
    • Topics: 75
    • Replies: 38
    • ☆☆

    Employee A is a carpenter and normally works 36 hours per week.The standard rate of pay is 3.60 per hour.A premium of 50% of the basic hourly rate is paid for all overtime hours worked.During the last week of October , employee A worked for 42 hours.The overtime hours worked were for the following reasons:
    Machine breakdown: 4 hours
    To complete a special job at the request of a customer: 2 hours

    How much of Employee A’s earnings for the last week of October would have been treated as direct wages?
    Mr John I’m so furious that I couldn’t solve this…Can you explain?

    I read somewhere Labour costs can be broken down into both direct and indirect costs according to type of worker and the work done..
    What do you think of the information above? What are they? Thank you very much…

    June 12, 2015 at 7:00 am #256525
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54720
    • ☆☆☆☆☆

    Direct labour is the basic pay (3.60 per hour) plus the overtime premium (1.80) if the overtime is on a specific job at the customers request.

    Indirect labour is general overtime premiums; bonus payments; idle time.

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