overtime the causes and Effects
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This document discusses the effects of overtime work and how overtime should be treated for cost accounting purposes. Working overtime can lead to decreased efficiency and increased costs due to late hours and postponing work. However, occasional overtime is not necessarily unhealthy and can show that workers are productive. When accounting for overtime, premium costs should be charged to specific orders for rush jobs, incorporated as increased normal wages if overtime is regular due to labor shortages, or charged to profit and loss as abnormal costs if due to issues like machinery breakdowns.
overtime the causes and Effects
- 1. Working beyond eight hours MONIKA KANSAL, Kamla lohtia S.D.College, Ludhiana, Punjab
- 2. Overtime Paid at a higher rate Late hours (inefficiency) Habit of postponing work in normal hours wear and tear of machinery More lighting, supervision
- 3. BUT Occasional overtime is Healthy Shows workers are not idle
- 4. Effects of overtime Loss of efficiency in production Increase in costs
- 5. Treatment of overtime premium 1. Rush order charged to cost of order 2 Increase the rate of normal wage-when a normal feature due to Labour shortage 3. abnormal reason (breakdown of machinery ) charged to costing profit and loss account
- 6. What , if this situation