I'm looking at the recovery rates for a manufacturing business and I'm going round in circles and confusing myself, so some assistance would be appreciated.
If a worker works a standard 40 hour week, but could work overtime if the need arises, then do I have multiple recovery rates to take account of the basic wage rate plus overhead (say rate 1), then an overtime rate excluding overhead (on the assumption that overheads have been recovered during the standard 40 hours (say rate 2)?
For Example: Rate 1 = Labour £10 per hour + Overhead £25 = £35, Rate 2 = Labour £15 per hour (assuming time and half for O/T)
Or should there just be one labour rate that encompases potential overtime?
Generally overtime is worked at the site, but it's a moving target, and I would like to have standard rates of recovery in the system to see if the business over or under recovered. If the team worked a 50 hours week then they would cover the basic 40 hours and recover all the overhead, then the final 10 hours would be at a lower rate. Just doesn't seem right??