sample assignment question cost and revenues, what am I doing wrong?

millsmum Registered Posts: 5 Regular contributor ⭐
Task 3 in the 2013 standards cost and revenues sample assesment paper 2. its regarding pay. I can't copy and paste as i am using a carp version of word.
I have always thought that when you are working out pay standard hours are at time, the time and a half hours are at time and a half so, if £12 its £6, and then double will be £12, but when I look at the answer for this it makes no sense at all.

do I work the hours out at just the premium rate bit or the full time and a half?

If anyone can look at this and then explain what they have done I would be really really happy and thank ful and possibly insightful
thanks in advance


  • millsmum
    millsmum Registered Posts: 5 Regular contributor ⭐
    I've uploaded the answers
  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
    Dear Tracy
    I hope this helps

    The key to labour cost questions is to read the question.

    Some firms treat overtime preium as part of the direct labour cost

    Some firms only include the normal rate x the total hours worked as direct and all premiums such as overtime are treated as production overhead

    And in rare cases (e.g. if you had to call out a plumber) overtime premium due to the firm being busy may be treated as production overhead but overtime premium due to call-outs outside the normal working times (at the customer's request) may be treated as direct labour costs.

    This question needs to be read carefully:
    1. The maintenance labour cost of normal time working
      The normal hours worked x the normal hourly rate
    2. The maintenance labour cost premium of time and a half working
      The time and a half hours x only the premium added to the normal hourly rate
    3. The total maintenance labour cost of double time working
      The double time hours x the the total hourly rate earned in double time
    4. Total maintenance labour cost
      I show my prefered approach on the upload
  • millsmum
    millsmum Registered Posts: 5 Regular contributor ⭐
    thank you ever so much, that makes perfect sense. :001_smile:
    I am not well and trying to revise, I must read the question carefully
Privacy Policy