ECR Exam help!

Pinchy

Is it just me or did anyone else think that Pilots Salaries were a direct cost and therefore not an overhead? I really deliberated and in the end did not include them in the table as we had a similar question on our simulation - our tutor told us not to include it as it was a trick question.
Only Indirect labour is included in Overheads and we already had that so Pilot wages must be a Direct cost, so not an Overhead???
:001_unsure:

twinmeister

Derren Brown

Yes you're right - now you mention it pilot's salaries could indeed be classed as direct costs. However, are they treated as 'production overheads' because they can't be attributed directly to a the individual cost units of either scheduled flight mile or a chartered flight mile?

Pinchy

I would have thought that if that was the case they would be an Indirect Labour cost wouldn't they?

any2002uk

mine just allocation them to 2 profit centres. as well for indirect cost to allocation