Calculate he total direct labour cost & the full production cost. And how is the

Question

Calculate he total direct labour cost & the full production cost. And how is the treatment of OT.

a) Cowteam Sdn Bhd is a company that carries out jobbing work. One of the jobs carried out in February was job 1357, to which the following information relates. Direct material Y: kilo Direct material Z kilo 400 kilos were issued from stores at a cost of RM5 per 800 kilos were issued from stores at a cost of RM6 per 60 kilos were returned. 320 labour hours were worked, of which 100 hours were done in overtime. 200 labour hours were worked, of which 100 hours were done in overtime. Department P: Department Overtime work is not normal in Department P, where basic pay is RM8 per hour plus an overtime premium of RM2 per hour. Overtime work was done in Department Q in February because of a request by the customer of another job to complete his job quickly. Basic pay in Department Q is RM10 per hour and overtime premium is RM3 per hour. Overhead is absorbed at the rate of RM3 per direct labour hour in both departments

Explanation / Answer

Direct Material Cost Y: 400*5 2000 Z: (800-60)*6 4440 Total Direct Material Cost 6440 Labour: Department P: 320*8 1760 Department Q: 100*10 1000 100*13 1300 Since This is specific requirement of the job, it is being charged as Labor Total Direct Labor Cost 4060 Overhead: Department P: 320*3 960 Department Q: 200*3 600 Department P: Overtime 100*2 200 Since this is abnormal, will be taken as Overhead Total Direct Overhead Cost 1760 Total Production Cost 12260

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