Akua works in the manufacturing department of Impala Iron Works (IIW) as a machine operator. Akua, a long-time employee of IIW, is paid on an hourly basis at a rate of \($25\) per hour. She works five 8-hour shifts per week from Monday to Friday (40 hours). Any time Akua works beyond these 40 hours is considered overtime for which she is paid at a rate of 160% (\($40\) per hour).

If the overtime falls on weekends, Akua is paid at a rate of double time (\($50\) per hour). She is also paid an additional \($26\) per hour for working on any holidays worked, even if it is part of her regular 40 hours. Akua is paid her regular wages even if the machines are down (not operating) due to regular machine maintenance, slow order periods, or unexpected mechanical problems. These hours are considered “idle time.”

During December Akua worked the following hours:

Included in the total hours worked are two company holidays (Christmas Eve and Christmas Day) during Week 4. All overtime worked by Akua was Monday–Friday, except for the hours worked in Week 3; all of the Week 3 overtime hours were worked on a Saturday.

1. Calculate

(a) direct manufacturing labor,

(b) idle time,

(c) overtime and holiday premium, and

(d) total earnings for Akua in December.
2. Is idle time and overtime premium a direct or indirect cost of the products that Akua worked on in December? Explain.

Transcribed Image Text:

Hours worked including machine downtime Week 1 49 Week 2 51 Week 3 45 Week 4 47 Machine downtime 5.0 6.0 34 3.0 4.0