Note re idle time, OT premium, and fringe benefits

Note re idle time, OT premium, and fringe benefits -...

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Accounting for Costs Relating to Idle Time, Overtime Premium, and Employee Benefits Idle Time Idle time represents the labour cost of direct labour employees who are unable to perform their assigned duties due to machine breakdowns, material shortages, power failures, etc. The labour costs for idle time hours are charged to Mfg. Overhead at normal wage rates . regardless of when the hours were worked. Note: DL represents productive hours worked at regular pay rate Idle time represents non-productive hours at regular pay rates Overtime Premium Any premium paid for labour time in excess of normal work times for direct labour employees is treated as part of MO. We are dealing only with the premium. The regular wage even for excess hours over and above normal work times is still charged to Direct Labour. Example: Employee works 44 hours and earns an hourly rate of $16/hr. Any hours worked over 40 hours are paid at time and one half ($24/hr). Steps:
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