Confused with a practice question (picture included)
RosieCarlisle
Registered Posts: 60
I hope the above image works! Basically I'm working on Costs and Revenues and attempting the above question from the Osborne tutorial book. You can see my original calculations crossed out, and the given answers written in.
I'm sure there's just something obvious I'm missing and the penny will drop eventually; but all we've been taught so far is to calculate basic pay INCLUDING overtime hours, and then calculate just the added premium of the overtime (for example, equivalent to half of basic pay).
The way it's written in the image, though, it says 512 hours were worked, but it's only worked out basic rate for 464 of those hours. Then it's calculated just the premium for the overtime hours  so surely the 48 (30+18) hours of overtime haven't been fully calculated? Haven't they missed the basic rate calculation for these hours?
Any help appreciated!
0
Comments

Overtime hours are included in the 464 according to the brackets. I think the 512 is a red herring that shouldn't really be there.0

It would actually make much more sense if the 512 hours was the incorrect part  although they've made the exact same (possible) error in the workbook, too.0

Certainly odd, but that's how they've calculated the answer.0

I agree with CeeJay Six
the Basic pay hours includes the overtime. The 512 should really not be there and should be greyed out. The question would make more sense then
Karen0 
The 512 is absolutely correct. This is used only to calculate a payment, the total/ actual hour worked is 416 hours.
The 464 already included OP rate 1 and 2 hence the actual hours pay is 416 which is £4160 on a basic pay. OP rate 1 and 2 is 48 hours altogether.
464  48 (OP rate 1 and 2) = 416, SO 416 *£10 = £4160 ( BASIC RATE PAY WITHOUT OVERTIME PREMIUM)
OVERTIME RATE 1 is 30*12.50 ( BASIC RATE and a QUARTER)= £375
OVERTIME RATE 2 is 18 * £15 (BASIC RATE and a HALF) = £645
So TOTAL PAY IS £4160 + £375 + £645 = £4805
But because the BASIC RATE of overtime worked is included in the BASIC PAY then we will have 416 (BASIC HOUR WORKED) + 48 ( BASIC HOUR OVERTIME ) = 464
464* 10 = £4640
30*£2.50 (OVERTIME PREMIUM ie a QUARTER OF BASIC PAY WITHOUT BASIC PAY) = 75
18* £5 ( OVERTIME PREMIUM ie HALF OF BASIC PAY WITHOUT BASIC PAY) = £90
SO, £4640 + £75 + £90 = £4805
Hope someone finds this useful.0
Categories
 All Categories
 1.2K Books to buy and sell
 2.3K General discussion
 18.9K For AAT students
 266 NEW! Qualifications 2022
 147 General Qualifications 2022 discussion
 9 AAT Level 2 Certificate in Accounting
 42 AAT Level 3 Diploma in Accounting
 65 AAT Level 4 Diploma in Professional Accounting
 8.9K For accounting professionals
 23 coronavirus (Covid19)
 274 VAT
 92 Software
 274 Tax
 138 Bookkeeping
 7.3K General accounting discussion
 193 AAT member discussion
 3.8K For everyone
 38 AAT news and announcements
 352 Feedback for AAT
 2.8K Chat and offtopic discussion
 590 Job postings
 17 Who can benefit from AAT?
 36 Where can AAT take me?
 44 Getting started with AAT
 26 Finding an AAT training provider
 48 Distance learning and other ways to study AAT
 25 Apprenticeships
 65 AAT membership