Question

Jane Ngob is employed by Sherid Limited. Last week she worked 56 hours assembling one of the company’s

products. Sherid’s employees work a 40-hour week and Jane is paid $48 per hour. Employees are paid double the
standard rate for any hours worked in excess of the standard 40 hours. Assume the overtime is the result of an overall
increase in demand for all products.
Required:
Allocate Jane’s wages for the week between direct labour cost and manufacturing overhead cost.
Direct labour cost
Manufacturing overhead cost
Total wages earned

Answer 1

Jane earned a total of $3456 for 56 hours of work; $1920 is allocated as direct lab our cost for the standard 40-hour workweek, and $1536 is allocated as manufacturing overhead cost for the 16 hours of overtime.

Step-by-step explanation:

The question is asking to calculate the total wages earned by Jane, including the division between direct lab our cost and manufacturing overhead cost. Jane worked 56 hours, with 40 hours being regular and 16 hours as overtime. Her standard hourly wage is $48. For overtime, she is paid double, so $96 per hour. Thus:

• Regular 40 hours pay: 40 hours * $48/hour = $1920
• Overtime pays (16 hours): 16 hours * $96/hour = $1536

The total wages earned are $1920 (regular pay) + $1536 (overtime pay) = $3456.

The direct lab our cost would typically include the regular pay for 40 hours ($1920). The manufacturing overhead cost would include the overtime pay of $1536, assuming the overtime was due to an overall increase in demand rather than a direct result of the specific lab our on the product Jane was assembling.

Therefore:

• Direct Labour Cost: $1920
• Manufacturing Overhead Cost: $1536
• Total Wages Earned: $3456