Quelpr
3 marksLabour Costing and Remuneration

CAPE Accounting Unit 2 · 2010 · Paper 2 · Question 1(b)(i)

An employee is paid $20 per hour for regular time and time and a half for overtime above 40 hours per week.

Assuming the employee is idle for 5 hours due to machine breakdowns and 4 hours due to material shortages in a 40-hour week with no overtime, allocate the wages between direct labour cost and manufacturing cost.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 1(a)(i)Classify EACH of the listed costs (items 2 to 16) as either variable or fixed with respect to volume or activity level.[7.5 marks]
  2. 1(a)(ii)Classify EACH of the listed costs (items 2 to 16) as either a selling and administrative cost or a product cost.[7.5 marks]
  3. 1(b)(ii)Assuming the employee works 48 hours in the following week with no idle time, allocate the wages between direct labour cost and manufacturing overhead cost.[3 marks]
  4. 1(b)(iii)Explain TWO ways the company could classify the cost of fringe benefits for direct labour workers in its cost records.[4 marks]
  5. 1(c)Calculate the total service department costs that should be allocated to EACH production department using the direct method.[10 marks]

More practice: the rest of this paper · more Labour Costing and Remuneration questions · all CAPE Accounting Unit 2 past papers