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During the month of September 20×3 the following labour hours were worked. Direct production workers 2,300 basic hours plus 500 hours of overtime. Indirect workers 640 hours including 120 hours of overtime The direct workers are paid a basic rate of $7.20 per hour and the indirect workers $6.20 per hour.Overtime hours are paid at time and a half. The overtime premium for direct labour is classed as an indirect cost. Of the hours paid to the direct production workers 100 of these were idle time hours. Calculate the direct labour cost for the month.
Sir I’ve calculated the answer 19440, deducting idle time hours, is it correct sir? Also sir I’ve confusion are we going to include idle time cost in direct labour?
We do not provide full answers to full questions.
You must have an answer in the same book in which you found the question and so you will know whether or not your answer is correct.
I assume that you have watched my free lecture on accounting for labour, where the rules are explained?
No sir i found this question posted by someone else in a different post, but no answer was provided reason why asked if my answer was correct, because I’ve not included idle labour hours, as it asks for direct labour cost
I’ve calculated the basic rate as 2300 hours are basic, but the overtime they’re working overtime premium wouldn’t be direct unless it’s specified on customer req, but we would calculate overtime basic
Aka 1 ×500 hrs ×$7.2, and for premium it would be 0.5 ×500×$7.2,
So in total it makes 1.5, so I’ve calculated overtime basic and the basic hours 2300 basic rate and got 19440 answer deducting idle time hrs from that. Please could you tell me if I’ve done it correctly, as my exam is scheduled tomorrow 27th
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