Highlander Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 48 hours during a week in January. The employee earns $12 per hour for a 40-hour week, and overtime is paid after 40 hours. For additional hours, the employee is paid an overtime rate of $18 per hour. The employee’s time was spent as follows: Regular duties involving cutting out knife handles..................................38 hoursGeneral shop cleanup duties..............................................................................9 hoursIdle time due to power outage..........................................................................1 hour 2. Total cost of wages: $624 Required:1. Calculate the total cost of the employee’s wages during the week described above.2. Determine the portion of this cost to be classified in each of the following categories:a. Direct laborb. Manufacturing overhead (idle time)c. Manufacturing overhead (overtime premium)d. Manufacturing overhead (indirect labor)
Highlander Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 48 hours during a week in January. The employee earns $12 per hour for a 40-hour week, and overtime is paid after 40 hours. For additional hours, the employee is paid an overtime rate of $18 per hour. The employee’s time was spent as follows:
Regular duties involving cutting out knife handles..................................38 hours
General shop cleanup duties..............................................................................9 hours
Idle time due to power outage..........................................................................1 hour
2. Total cost of wages: $624
Required:
1. Calculate the total cost of the employee’s wages during the week described above.
2. Determine the portion of this cost to be classified in each of the following categories:
a. Direct labor
b. Manufacturing
c. Manufacturing overhead (overtime premium)
d. Manufacturing overhead (indirect labor)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
