Final answer:
The direct labor overtime premium should be charged to a specific job when necessitated by unique job requirements, like a client's request for a rush order. Broad operational causes like worker inefficiency or a supervisor's discretionary decision generally reflect wider issues, not specific to a job. Efficiency wage theory and strategic responses to economic cycles influence overtime decisions.
Step-by-step explanation:
The direct labor overtime premium should be charged to a specific job when the overtime is justified by the unique circumstances of that job. Option 3, a client's request, fits this justification as the overtime is directly attributable to the client's specific needs and desires. For instance, if a client requests a rush order that necessitates overtime work, the associated costs should be charged to that particular job. It's less clear cut in cases of inefficiency of workers or a supervisor's decision because these reasons do not stem from the direct requirements or requests of a specific job. Instead, these are generally indicative of broader operational issues.
Efficiency wage theory suggests that paying workers above market rate can lead to increased productivity as employees are motivated to maintain their preferred wage, leading to less turnover and a reduction in training and hiring costs. During an economic downturn, firms may resist layoffs to avoid the future costs associated with hiring and training. As demand increases, firms may extend overtime to existing employees until it's clear that the economic recovery is sustained, hence avoiding the premature costs associated with expanding the workforce.