Direct & Indirect Labour
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Hi everyone,<BR> <BR>Just having a last minute confidence issue with direct and indirect labour, especially relating to overtime. I keep getting confused when to include the overtime as direct labour and the premium as indirect and when the whole lot should be classed as direct.<BR> <BR>I've just done the Gift practice exam again which says 'direct labour overtime payments are included in direct costs'. Am I right to assume then that if it says something like that, everything (including the premium) is direct, whereas if its says something like ' calculate direct wages' the total hours (including overtime) are classed as direct, with the premium only indirect.<BR> <BR>Confused!!!!
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Direct & Indirect Labour
Basic Wages- Direct Labour<BR>Overtime (normal rate of pay)- Direct Labour<BR>Overtime premium - ie time and half ( you would process the half to indirect labour)<BR><BR><BR>When to class overtime as indirect labour or indirect expense?<BR><BR>indirect labour - when work is requested by client for a big order or by a certain time scale<BR><BR>Indirect expense - When overtime is cause by general pressure of work or machine break down0 -
Direct & Indirect Labour
I think the confusion comes as a result of some of the papers saying "direct labour overtime payments are included in direct costs" <BR><BR>Unless stated otherwise, it's as petrol monkey (btw cheers for that explanation of IRR) wrote.<BR><BR>0 -
Direct & Indirect Labour
Thanks very much for that - I'll just have to make sure I read the questions properly!0 -
Direct & Indirect Labour
so slight typo on my part. I meant if overtime is requested by the client then its cast as direct labour and if its due to pressure its indirect labour.<BR>0