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100 hours of skilled and 56 hours of unskilled labour will be required for the upholstery and
flooring work. Skilled labour is paid the market rate of $25/hour and is currently fully
employed on another job, where they earn a contribution of $6/hour. Alternatively new
skilled labour could be employed, but the new workers will require training at a cost of
$14/hour for the first 10 hours they are working.
Unskilled workers are currently paid $12/hour and each of the 5 workers is guaranteed a
minimum wage of $420 per week. Each unskilled employee has enough work allocated to
them for the next three weeks to earn $372 per week. The work to be done by the unskilled
labour on Bow must be completed within the first week of the project starting and overtime
is paid at time and half.The unskilled workers are guaranteed work for $420/$12 = 35 hours.
They are currently working $372/$12 = 31 hours. Therefore there are 4 hours per week
per worker spare capacity. There are 5 workers therefore 20 hours a week will have
no cost, leaving 36 hours to be paid for at time and a half.
36 × $12 × 1.5 = $648Hello Sir
I m unable to understand a. how did they calculate 36 hours as overtime
b. I didn’t understand how dividing 2 costs could give the hours paid for 372/12= 31 hours since there is 4 hours spare time how is it costed as overtime
your explanation would be helpful thank you so much .The 56 hours required must all be worked in the first week.
Each worker currently has 4 hours a week free (so 20 hours in total) and these 20 hours will not be paid as overtime.
However the remaining 56 – 20 = 36 hours are not free time and so they will have to be paid as overtime.
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