There is this question in BPP which I cannot understand
Jaffa Co employs two types of labour: skilled workers(direct labour) and semi skilled workers(indirect labour). Skilled labours are paid $ 10 per hour and semi skilled are paid $ 5 per hour.
Skilled labour works 20 hours overtime, 12 on specific order and 8 on general
Overtme is paid at time and quarter.
Semi skilled worked 30 hours overtime, 20 hours for a specific order at a customer's request and the rest for general purposes . Overtime is paid at time quarter
On the answer i understood that 20 hour overtime is direct cost because he worked on SPECIFIC order.
But why we consider GENERAL overtime hour as a direct cost.
Please help me to understand this point. Thank you
Ask the Tutor ACCA MA
Labour (direct indirect)
3y ago#1Have you watched my free lectures on this, because I do explain which costs are regarded as direct and which are regarded as indirect.
I watched many times and i got everything. Please help me about this question.
I though only specific overtime cost will be direct.
3y ago#3The question says that the semi-skilled workers are indirect labour, and therefore all of their pay is an indirect cost.
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