ACCA MA · Chapter 5 · Question 5 of 10
A direct production worker is paid $15 per hour. In one week she worked 40 basic hours and 6 overtime hours, paid at time and a half. The overtime was caused by a generally high workload. What is the direct labour cost for the week?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $690
Explanation
Direct labour = all hours worked at the basic rate = 46 x $15 = $690. The overtime premium of 6 x ($15 x 0.5) = $45 is treated as production overhead because it comes from general workload. Total gross pay is 690 + 45 = $735.
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