In a factory the basic wages rate is Rs.10 per hour and overtime rate as follows

Before and after normal working hours175% of basic wage rate

Sunday and holidays225% of basic wage rate

During the previous year the following hours were worked:

Normal time1,00,000 hours

Overtime before and after working hours20,000 hours

Overtime on sundays and holidays5,000 hours

Total1,25,000

The following hours have been worked on job Z

Normal working hours1,000 hours

Overtime before and after100 hours

Sunday and holidays25 hours

1,125 hours

Required :

Calculate the labour cost chargeable to job Z and overhead in each of the following instances

1. Where overtime is worked regularly throughout the year as policy due to labour shortage
2. Where overtime is worked irregularly to meet the requirements of production
3. Where the overtime is worked at the request of the customer to complete the job
4. Where overtime is worked due to breakdown of machinery.

Answer rating: 100% (QA)

1 Where overtime is worked regularly throughout the year as a policy due to labor shortage Normal working hours for job Z 1000 hours Overtime before a... View the full answer