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Hi Mr. John,
The syllabus state that “If overtime is worked regularly by a production department in the normal course of operations, the overtime premium paid to direct workers could be incorporated into the (average) direct labor hourly rate”. Could you explain how overtime seems to arise regularly/frequently?
I am looking forward to receiving your explanation Mr.John ^^
You may have read that in a book, but it does not say that anywhere in the syllabus.
It might be (for example) that the normal working hours are 40 per week. Maybe occasionally the workers had to work 50 hours (i.e. 10 hours overtime). However if this was happening every week then maybe it would make more sense to regard 50 hours as being the normal working week.
This is unlikely to be at all relevant for the exam. Everything relevant is covered in my free lectures on accounting for labour.
I understand now, you explained it very clearly. Thank you so much Mr.John. Wish you have a lovely weekend ahead.
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