Hello all,
Our company is operating in aircraft maintenance, repair and overhaul (MRO) sector. Wages are paid to the direct&indirect blue collar employees on monthly basis, regardless of how much man/hour spent. But overtime is paid for the excess time charged.
Regarding the classification of wages paid to the blue collar as fixed and variable, what do you think the classification will be? Should we assume that these wages are related with the level of production, and totally assumed as variable, although the payment is fixed on monthly basis; or only the overtime paid is …

Dear Ali,
It is very nice for me to see your name in our group since I have remember our past in Arthur Andersen.
 
Referring to your question, I think the fixed part should be evaluated as fixed and the overtime part as variable.
 
Kind regards,
 
Alper

Hello All …

This is an interesting question – but I would argue that the simple ‘variable – v – fixed’ cost focus is constrained if one doesn’t take a broader view of these costs.
As clearly the (“blue-collar”) labour involved is a ‘Cost of Sales’, the amount of labour …