Blank Mind!

Sam22

Could someone possibly help me out.

I'm having a mare and just can't work this out and I know it's going to be very simple when someone shows me where to go.

Question:
Complete the following working schedule for direct labour.
Each unit takes 6 minutes to make.
There are 22 direct labour employees, each working 160 basic hours a month.
Additional hours are paid at an overtime rate of time and a half.
The over time premium is included in the direct labour cost.

Direct Labour Hours £
Basic time @ £10 per hour 3520 35200 (this is what I've done so far)
Overtime


The production budget = Units
Opening inv of finished goods 5000
Production 40000
Subtotal 45000
Sales 38000
Closing inv finished goods 7000

I know this is going to be really simple, its been a long day and I'm probably not concentrating properly but would someone be able to talk me through the process of working out the overtime hours?

Thanks!

crispy

Hello,

- If each unit takes 6 minutes therfore they can make 10 per hour.

- As per the production budget they are producing 40,000 during the month which would require 40,000 / 10 = 4,000 hours

- We have available 3,520 hours normal time so require 480 hours overtime

3,520 Hours @ £10 = £ 35,200
480 Hours @ £ 15 = £ 7,200

Not done this for a while so hope someone else can back up my answer !

Sam22

ooo I feel so stupid now!!

Thank you so much for doing that. I was overlooking that they would make 10 per hour and to divide that by the 40000.

It all makes perfect sense. Thanks again.