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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) $9,600Gross wages of indirect operatives:
Normal hours $14,300
Overtime hours (at a premium of 50% over the normal rate) $1,650Overtime is worked, due to the request of the customer.
(im stuck with finding the premium to add to the direct cost)
If 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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