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