June 06 Pcr And June 05 Pcr

[Celtic Angel]

Hi All

I'm posting this one was a question from a friend at college. Section 1 of both these papers has the overtime premium being charged to overheads. In one paper it is shown in the fixed overhead calculation in the other paper it is not. This is extremely confusing does anyone know why its not being shown in one but is in the other or vice versa?

V

[acky2106]

Celtic Angel, i think on the June '06 paper it does state that overtime premium is not to be accounted for in your direct labour budget and therefore won't be in your cost of production budget either. so you simply take the hit for all hours at basic cost and in the accounting system the premium would be in your overheads account, therefore it makes part of the overhead charge you receive.

I hope that makes sense?

Acky.