Employees are paid $6/ hour for a standard 40 hr shift.
Overtime is paid at time and 1/3.
The employee is expected to make 80 units / week.
Each unit in excess of 80 is paid a $5 less any overtime premium that would related ti the time the additional unit would normally take.
What is the employee wages in a week in which 90 units are made and the employee works 44 hours?
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Labour Costs & Renumeration Costs
so .... he has made 10 extra units which means:
gross for 10 units = 10 x 5 = 50
less OT premium = 4 hrs x 2 = 8 (premium = 1/3 x 6 = 2)
---------------------------------------= 42
so he will make 240 + 42 = 282
do let me know if this is the correct answer
Not according to the notes in the book...
This is why I am puzzled, see notes here:
Chapter 8
Example 1
Note: each unit is expected to take 40/80 = 0.5 hours
Basic wages for 44 hours = 44 x $6 = $264
Overtime premium 4 x $6 x ? = 8
Extra units 10 x $5 = 50
Overtime premium that could be associated with the extra units
10 x 0.5 x $6 x ? = (10)
312
ok. these questions r still confusing to me..:)
notice i put 240 for 40 hours.. thats where i went wrong. it shd be 44x6=264
so now go thru my logic and tell me if u still have problems understanding
explain this over time premium
if the question is saying time and a third that should be 6+(6x1/3)= 8
shouldn't the over time premium be multiplies by the $8
premium is just the extra amount over the regular pay.
for example, if regular rate is 10 and ot is paid at time and a half, this means the overtime rate is = 10 + 10 x 1.5 = 10 + 5 = 15.
now, the 5 that u see is called the OT premium.
and OT premiums are always indirect costs by the way.
in our example it says that ot is paid at 1/3. this means 6 + 6x(1/3) = 6+2=8
so the premium in this case is 2
the total amount paid fot overtime is 8/hr, of this 2 is called ot premium.
if u understand this let me know and i can explain the question at hand
Yes I understand that now, for some reason I am thinking that the premium should be the time add the half.
I get it now.
good...:)
if u have my email, u can add me to skype for any help. opentuition has helped me a lot and this is a way of giving back to the community
Basic hrs = 4 weeks x 38 hrs x 40 labor = 6080
OT hours = 6528 - 6080 = 448
Basic pay= 6080 x 4 = 24320
OT pay = 448 x (4 + 4 x 0.35) = 2419
Total $ = 26739
Deductions @30%=(8022)
Net wages = 26739-8022=18717
Indirect: idle 188 hrs x 4 = 752
indirect OT premium 448 x 1.4 =627 (4x.35=1.4)
total indirect=1379
direct labor: (6080 + 448 - 188) x 4 = 25360
please let know if this matches the answer
its 4 plus 4 x 35%. it says in the question that ot is paid at 35% of basic rate.
ot pay= basic pay plus ot = 4 plus 4x35% = 4 plus 1.4 = 5.4
yes... gross is sum of direct and indirect
its just that they r recorded/treated differently in reporting
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