Question

Kaleidoscope Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles worked 49 hours during a week in January. The employee earns $14 per hour for a 40—hour week. For additional hours the employee is paid an overtime rate of $19 per hour. The employee’s time was spent as follows:
Regular duties involving cutting out knife handles . . . . . . . . . . . . . . . 41 hours
General shop cleanup duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 hours
Idle time due to power outage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 hours

Required:
1. Calculate the total cost of the employee’s wages during the week described above.
2. Determine the portion of this cost to be classified in each of the following categories:
a. Direct labor
b. Manufacturing overhead (idle time)
c. Manufacturing overhead (overtime premium)
d. Manufacturing overhead (indirect labor)



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  • CreatedApril 22, 2014
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