Labour costs for a period in the production cost center P1 include: (jan-june 2019)
Gross wages of direct operatives:
Normal hours $76,200
Overtime hours (at a premium of 50% over the normal rate) $9,600
Gross wages of indirect operatives:
Normal hours $14,300
Overtime hours (at a premium of 50% over the normal rate) $1,650
Overtime is worked, due to the request of the customer.
(im stuck with finding the premium to add to the direct cost)
Ask the Tutor ACCA MA
What amount of the above labour costs would be charged to the work-in-progress a
7y ago#1If the premium is 50% over the normal cost, then for every $100 normal cost the premium is $50 and the full amount is $150.
Therefore the premium is 50/150 of the amount paid.
So the premium for the overtime hours of the direct operatives is 50/150 x $9,600 = $3,200.
The premium for the indirect operatives is not relevant, because all payments to indirect operatives is an indirect cost.
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