3. Labour Costs (not complete) Flashcards Preview

3.3 Management Accounting: Costing > 3. Labour Costs (not complete) > Flashcards

Flashcards in 3. Labour Costs (not complete) Deck (8)
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1
Q

Labour payment methods are:

A

Time rate
Piecework rate
Bonus system - time rate plus bonus based on % of time saved.

2
Q

How are overtime and bonus payments handled

A

…charged to indirect labour rather than direct labour

Unless customer requested rush job … then charged to direct labour and cost passed to customer.

3
Q

Idle time and time spent training?

A

Normally charged to overheads as indirect labour.

4
Q

Prime cost is ?

A

Direct materials
Direct Labour
Direct expenses

= Total direct costs (or ‘Prime cost’)

5
Q

Overheads are ?

A

Indirect materials
Indirect labour
Indirect expenses
= Total indirect costs (or ‘Overheads)

6
Q

Direct labour cost is wages to those who work on production line, assembly or involved in output of a service biz

A

.

7
Q

Normally charge ‘overtime premium’ (only the extra amount on top of basic rate) to indirect labour

A

Unless customer requested.

8
Q

Idle time amount (eg piecework employee gets time rate if machine breaks down)

Usually charged to overheads as indirect labour

A

Same with things like time off production line at a training course … normally indirect labour charged to production overheads