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Parents Pricing Home NSC Accounting Introduction to Fixed Assets Calculate the direct labour cost
Calculate the direct labour cost - NSC Accounting - Question 5 - 2017 - Paper 1 Question 5
View full question Calculate the direct labour cost.
Details of factory personnel:
Workers in production:
Number of workers: 5
Normal time: 1 800 hours per annum per worker.
Normal t... show full transcript
View marking scheme Worked Solution & Example Answer:Calculate the direct labour cost - NSC Accounting - Question 5 - 2017 - Paper 1
Calculate the Normal Labour Cost Only available for registered users.
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To calculate the normal labour cost, use the formula:
N o r m a l e x t L a b o u r e x t C o s t = N u m b e r e x t o f e x t W o r k e r s i m e s N o r m a l e x t T i m e i m e s N o r m a l e x t T i m e e x t R a t e Normal ext{ }Labour ext{ }Cost = Number ext{ }of ext{ }Workers imes Normal ext{ }Time imes Normal ext{ }Time ext{ }Rate N or ma l e x t L ab o u re x t C os t = N u mb ere x t o f e x t W or k ers im es N or ma l e x t T im e im es N or ma l e x t T im ee x t R a t e Substituting the given values:
N o r m a l e x t L a b o u r e x t C o s t = 5 i m e s 1 , 800 i m e s 70 = R 630 , 000 Normal ext{ }Labour ext{ }Cost = 5 imes 1,800 imes 70 = R630,000 N or ma l e x t L ab o u re x t C os t = 5 im es 1 , 800 im es 70 = R 630 , 000
Calculate the Overtime Cost Only available for registered users.
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For the overtime cost, calculate as follows:
Overtime Rate = Normal Time Rate × 1.6
Thus,
O v e r t i m e e x t R a t e = 70 i m e s 1.6 = R 112 Overtime ext{ }Rate = 70 imes 1.6 = R112 O v er t im ee x t R a t e = 70 im es 1.6 = R 112 Next, calculate the total Overtime Cost:
O v e r t i m e e x t C o s t = O v e r t i m e e x t H o u r s e x t W o r k e d i m e s O v e r t i m e e x t R a t e = 660 i m e s 112 = R 73 , 920 Overtime ext{ }Cost = Overtime ext{ }Hours ext{ }Worked imes Overtime ext{ }Rate = 660 imes 112 = R73,920 O v er t im ee x t C os t = O v er t im ee x t Ho u rse x t W or k e d im es O v er t im ee x t R a t e = 660 im es 112 = R 73 , 920
Calculate the Employer's Contributions Only available for registered users.
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The employer's contribution is calculated on the normal labour cost:
E m p l o y e r ’ s e x t C o n t r i b u t i o n = N o r m a l e x t L a b o u r e x t C o s t i m e s 9 % = 630 , 000 i m e s 0.09 = R 56 , 700 Employer’s ext{ }Contribution = Normal ext{ }Labour ext{ }Cost imes 9\% = 630,000 imes 0.09 = R56,700 E m pl oyer ’ se x t C o n t r ib u t i o n = N or ma l e x t L ab o u re x t C os t im es 9% = 630 , 000 im es 0.09 = R 56 , 700
Calculate the Total Direct Labour Cost Only available for registered users.
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Finally, add all components to find the total direct labour cost:
T o t a l e x t D i r e c t e x t L a b o u r e x t C o s t = N o r m a l e x t L a b o u r e x t C o s t + O v e r t i m e e x t C o s t + E m p l o y e r ’ s e x t C o n t r i b u t i o n Total ext{ }Direct ext{ }Labour ext{ }Cost = Normal ext{ }Labour ext{ }Cost + Overtime ext{ }Cost + Employer’s ext{ }Contribution T o t a l e x t D i rec t e x t L ab o u re x t C os t = N or ma l e x t L ab o u re x t C os t + O v er t im ee x t C os t + E m pl oyer ’ se x t C o n t r ib u t i o n So,
T o t a l e x t D i r e c t e x t L a b o u r e x t C o s t = 630 , 000 + 73 , 920 + 56 , 700 = R 760 , 620 Total ext{ }Direct ext{ }Labour ext{ }Cost = 630,000 + 73,920 + 56,700 = R760,620 T o t a l e x t D i rec t e x t L ab o u re x t C os t = 630 , 000 + 73 , 920 + 56 , 700 = R 760 , 620 Join the NSC students using SimpleStudy...97% of StudentsReport Improved Results
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