The milling section of a factory engages 25 direct workers. During the month of June, they were paid for 4,800 normal attendance hours at an average rate of Rs.1.50 per hour. In addition, they also worked for 400 over-time hours at a double pay. The overtime was necessitated by abnormal circumstances in the month of April. For the purpose of reckoning labour cost, 40% for fringe benefits is to be added to the gross wages.
From the following particulars, find out:
(a) The worked-out total labour cost and allocate it to different cost elements:
Hours booked to jobs – 4,200
Allowed idle time – 12½%
There was no incidence of abnormal idle time. Actual ideal time was exactly in accordance with the standard set for the purpose.
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