should be charged to costing profit and loss account;
should not be charged at all
should be charged to the job directly
should be charged to the highest profit making department
Answer is Wrong!
Answer is Right!
The correct answer is: C. should be charged to the job directly.
Overtime premium is the additional amount paid to employees for working beyond their regular working hours. It is usually paid at a higher rate than the regular hourly rate.
If overtime is resorted to at the desire of the customer, then the overtime premium should be charged to the job directly. This is because the customer is the one who is benefiting from the overtime work, and therefore should be the one who pays for it.
Option A is incorrect because costing profit and loss account is used to track the costs of production. Overtime premium is not a production cost,
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