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Sir what is exactly meant by, “Additional payment less any overtime premium”? Does it means we give additional amount other than overtime premium or in change of overtime premium we give this amount.
Overtime premiums are normally regarded as an indirect employment cost.
So: normal hours = 40; actual = 50.
Normal pay/hr = 12; overtime premium = 50% ie 18/hr in total.
Total payment = 50 x 12 + 10 x 12 x 0.5 = 600 + 60 = 660
Debited to direct costs = 600 (ie actual pay of 660 less overtime premium of 60)
Debited to indirect costs = 60.This is an MA1 topic, not FA1
No sir, it is from your FA1 notes actually. Both are same by the way except accountings.
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