Final answer:
The total compensation for Naughty Rusted would be calculated as $950 of direct labor and $60 of manufacturing overhead. This includes 40 hours of straight-time work and 5 hours of overtime, along with 3 hours accounted for as idle time. The answer options provided do not match this calculation.
Step-by-step explanation:
The question asks us to calculate the compensation for Naughty Rusted, who worked 45 hours, including 5 hours of overtime and 3 hours of idle time due to material shortages. The straight-time pay is $20 an hour, and overtime pay is $30 an hour. Idle time due to material shortages is often considered indirect labor and thus may be reported as manufacturing overhead.
To find the direct labor cost, we use the formula:
- (Total hours worked - Overtime hours) × Regular rate
- Overtime hours × Overtime rate
The direct labor cost is calculated as follows:
- (45 hours - 5 hours overtime) × $20/hour = $800
- 5 hours × $30/hour = $150
The total direct labor cost is $800 + $150 = $950.
Then, the compensation for 3 hours of idle time at the regular rate of $20/hour can be considered manufacturing overhead, which totals:
- 3 hours × $20/hour = $60 of manufacturing overhead
Therefore, the answer is $950 of direct labor and $60 of manufacturing overhead, which is not listed in the options provided. The closest option seems to be 'd', but the amount of direct labor is incorrect as per our calculations.