Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

Employees receive a basic wage of $\$10$ per hour. The overtime wage is paid at time and a half. A bonus is paid at a rate of $10\%$ of basic pay if production is above target. For one month, the data are: total hours worked = $1500$, hours paid at the basic rate = $1000$, target production = $12\,500$ units, actual production = $15\,000$ units. What was the total factory labour cost for the month?

  • A$\$16\,500$
  • B$\$18\,500$
  • C$\$19\,250$
  • D$\$24\,750$

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