This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Hey abiyibameyi — ready when you are. First, let's determine the basic and overtime rates. Basic wage rate = N8 per hour Evening overtime rate (Time plus (1)/(3)) = 8 × (1 + (1)/(3)) = 8 × (4)/(3) = (32)/(3) N per hour Weekend overtime rate (Double time) = 8 × 2 = 16 N per hour The hours worked for each job are: | Job | Normal Time (hrs) | Evening Overtime (hrs) | Weekend Overtime (hrs) | |-----|-------------------|------------------------|------------------------| | X | 6,000 | 600 | 200 | | Y | 10,000 | 1,200 | 100 | | Z | 8,000 | 2,100 | 600 | a) Where overtime is worked regularly throughout the year as company policy due to labour shortage. In this circumstance, the overtime premium is treated as an overhead cost, not directly charged to the job. Only the basic rate for all hours worked is charged to the job. Step 1: Calculate the total hours worked for each job. • Job X: 6,000 + 600 + 200 = 6,800 hours • Job Y: 10,000 + 1,200 + 100 = 11,300 hours • Job Z: 8,000 + 2,100 + 600 = 10,700 hours Step 2: Calculate the labour cost for each job by multiplying total hours by the basic rate. • For Job X: Labour Cost = 6,800 hours × 8 N/hour = N54,400 • For Job Y: Labour Cost = 11,300 hours × 8 N/hour = N90,400 • For Job Z: Labour Cost = 10,700 hours × 8 N/hour = N85,600 b) Where Overtime is worked specifically at the customer's request to expedite delivery. In this circumstance, the entire cost of overtime (basic rate plus premium) is directly charged to the specific job. Step 1: Calculate the cost for normal time, evening overtime, and weekend overtime for each job using their respective rates. • For Job X: Normal time cost = 6,000 hours × 8 N/hour = 48,000 N Evening overtime cost = 600 hours × (32)/(3) N/hour = 6,400 N Weekend overtime cost = 200 hours × 16 N/hour = 3,200 N Total labour cost for Job X = $48,000 + 6,400 + 3,200 = N57,600