Len Lippart is a line worker in the assembly department
Len Lippart is a line worker in the assembly department of Maxart Manufacturing. He normally earns $12 per hour, but gets time and a half ($18 per hour) for overtime, over 40 hours per week. He earns double time if he works holidays even if he has not worked 40 hours that week.
Sometimes the assembly-line equipment goes down and Len has to wait for the mechanics to repair the equipment or there is a scheduling mix-up. Len is paid for this time and Maxart considers this idle time.
In May, Len worked two 42-hour weeks, one 43-hour week, and the last week he worked 40 hours, but one of those days was a national holiday. During regular hours, the assembly-line equipment was down 4.2 hours in May, and Len had one hour of idle time because of a scheduling mix-up.
1. Calculate
(a) Direct manufacturing labour,
(b) Idle time,
(c) Overtime holiday premium, and
(d) Total earnings for Len in May.
2. Is idle time and overtime premium a direct or indirect cost of the jobs that Len worked on in May? Explain.
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