A loom operator in a textiles factory earns $16.00 per hour. By contract, the employee earns $24.00 (time and a half) for overtime hours. The operator worked 44 hours during the first week of May, and overtime is paid after the usual 40 hours. 1) Compute the loom operator's compensation for the week. 2) Calculate the employee's total overtime premium for the week. 3) How much of the employee's total compensation for the week is direct-labor cost? How much is overhead?

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Business

Rey Hickman

5 May, 16:03

A loom operator in a textiles factory earns $16.00 per hour. By contract, the employee earns $24.00 (time and a half) for overtime hours. The operator worked 44 hours during the first week of May, and overtime is paid after the usual 40 hours. 1) Compute the loom operator's compensation for the week. 2) Calculate the employee's total overtime premium for the week. 3) How much of the employee's total compensation for the week is direct-labor cost? How much is overhead?

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Kinley · Answer 1

1) $736

2) $24

3) Total compensation for direct labor = $736 - $24 = $712

Overhead = $24

Explanation:

(1) Normal wages for the week = Normal hours * normal hourly rates

= 40 hours * $16 per hour = $640

Overtime hours = Total time - Normal hours = 44 - 40

= 4 hours

overtime wages = overtime hours * overtime hourly rates

= 4 hours * $24 = $96

Operators compensation for the week = $640 + $96

= $ 736

(2) Employee's total overtime premium

= (overtime rate - normal time rate) * (Total hours - normal hours)

= ($24 - $16) * (44 - 40)

= ($8) * (4)

=$24

(3) Total compensation for direct labor = $736 - $24 = $712

Overhead = $24