Deck 18: Further Classification of Labor Costs

Question 1

A direct labor worker at Blagg Corporation is paid $14 per hour for regular time and time and a half for all work in excess of 40 hours per week.The company's fringe benefits cost $4 for each hour of employee time (both regular and overtime).Last week this employee worked 45 hours but was idle for 2 hours due to material shortages.The company treats all fringe benefits as part of manufacturing overhead.
Required:
Determine how much of the worker's wages for the week would be classified as direct labor cost and how much would be classified as manufacturing overhead cost.Show your work.

Answer 1

Question 2

Brooke Foster is employed by Wong Laboratories,Inc. ,and is directly involved in preparing and packaging the company's leading sleep aid,RestWell.Brooke's basic wage rate is $15 per hour,and she is paid time and a half for any work in excess of 40 hours per week.Additionally,Wong Laboratories provides a fringe benefit package that costs the company $5 for each hour of employee time (regular or overtime).During a recent week,Brooke worked 49 hours but was idle for 3 hours due to materials shortages.
Required:
a.Assume that Wong Laboratories treats all fringe benefits as part of manufacturing overhead.Compute Brooke's total wages and fringe benefits for the week and indicate how much of her wages and fringe benefits for the week would be allocated to direct labor and how much would be allocated to manufacturing overhead.

b.Assume that Wong Laboratories treats the part of fringe benefits related to direct labor as a component of direct labor cost.Compute Brooke's total wages and fringe benefits for the week and indicate how much of her wages and fringe benefits would be allocated to direct labor and how much would be allocated to manufacturing overhead.

Answer 2

a. b.Total wages and fringe benefits would be $1,047.50 as shown above.

Question 3

Wendy works on the assembly line of a manufacturing company where she installs a component part for one of the company's products. She is paid $20 per hour for regular time and time and a half for all work in excess of 40 hours per week.

-Wendy works 45 hours during a week in which there was no idle time.The allocation of Wendy's wages for the week between direct labor cost and manufacturing overhead cost would be:

A)Option A
B)Option B
C)Option C
D)Option D

Answer 3

Option D

Question 4

Wendy works on the assembly line of a manufacturing company where she installs a component part for one of the company's products. She is paid $20 per hour for regular time and time and a half for all work in excess of 40 hours per week.

-Wendy's employer offers fringe benefits that cost the company $3 for each hour of employee time (both regular and overtime).During a given week,Wendy works 42 hours but is idle for 3 hours due to material shortages.The company treats all fringe benefits as part of manufacturing overhead.The allocation of Wendy's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A)Option A
B)Option B
C)Option C
D)Option D

Question 5

A direct labor worker at Gerding Corporation is paid $16 per hour for regular time and time and a half for all work in excess of 40 hours per week.This employee works 45 hours during a week in which there was no idle time.
Required:
Determine how much of the worker's wages for the week would be classified as direct labor cost and how much would be classified as manufacturing overhead cost.Show your work.

Question 6

The overtime premium paid to workers is usually included as a part of:

A)selling cost.
B)direct labor cost.
C)administrative cost.
D)manufacturing overhead cost.

Question 7

A direct labor worker at Cogswell Corporation is paid $22 per hour for regular time and time and a half for all work in excess of 40 hours per week.The company's fringe benefits cost $7 for each hour of employee time (both regular and overtime).Last week this employee worked 43 hours but was idle for 3 hours due to material shortages.The company treats all fringe benefits relating to direct labor as added direct labor cost and the remainder as part of manufacturing overhead.
Required:
Determine how much of the worker's wages for the week would be classified as direct labor cost and how much would be classified as manufacturing overhead cost.Show your work.

Question 8

An assembly line worker is paid $20 per hour and an extra $10 per hour for every hour over 40 that is worked in a given week.If this worker works 44 hours in a given week,how much of her wage should be included in manufacturing overhead cost?

A)$0
B)$40
C)$80
D)$120

Question 9

Chuck is a quality inspector on the assembly line of a manufacturing company. He is paid $16 per hour for regular time and time and a half for all work in excess of 40 hours per week. He is classified as a direct labor worker.

-Chuck's employer offers fringe benefits that cost the company $5 for each hour of employee time (both regular and overtime).During a given week,Chuck works 45 hours but is idle for 2 hours due to material shortages.The company treats all fringe benefits relating to direct labor as added direct labor cost and the remainder as part of manufacturing overhead.The allocation of Chuck's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A)Option A
B)Option B
C)Option C
D)Option D

Question 10

A direct labor worker at Damann Corporation is paid $24 per hour for regular time and time and a half for all work in excess of 40 hours per week.This employee works 48 hours in a given week but is idle for 3 hours during the week due to equipment breakdowns.
Required:
Determine how much of the worker's wages for the week would be classified as direct labor cost and how much would be classified as manufacturing overhead cost.Show your work.

Question 11

The overtime premium paid to factory workers is usually considered to be part of direct labor cost.

Question 12

Some companies classify labor fringe benefits for direct labor workers as part of the direct labor cost and some classify these costs as manufacturing overhead.

Question 13

James Andersen,an operator of a machine on the assembly line,receives time-and-a-half for any time worked in excess of 40 hours per week.His rate of pay is $12 per hour.How much should be charged to manufacturing overhead if he worked 46 hours last week and had no idle time?

A)$0
B)$72
C)$36
D)$108

Question 14

Chuck is a quality inspector on the assembly line of a manufacturing company. He is paid $16 per hour for regular time and time and a half for all work in excess of 40 hours per week. He is classified as a direct labor worker.

-Chuck works 42 hours during a week in which there was no idle time.The allocation of Chuck's wages for the week between direct labor cost and manufacturing overhead cost would be:

A)Option A
B)Option B
C)Option C
D)Option D

Question 15

Wendy works on the assembly line of a manufacturing company where she installs a component part for one of the company's products. She is paid $20 per hour for regular time and time and a half for all work in excess of 40 hours per week.

-Wendy works 46 hours in a given week but is idle for 4 hours during the week due to equipment breakdowns.The allocation of Wendy's wages for the week between direct labor cost and manufacturing overhead cost would be:

A)Option A
B)Option B
C)Option C
D)Option D

Question 16

Chuck is a quality inspector on the assembly line of a manufacturing company. He is paid $16 per hour for regular time and time and a half for all work in excess of 40 hours per week. He is classified as a direct labor worker.

-Chuck's employer offers fringe benefits that cost the company $5 for each hour of employee time (both regular and overtime).During a given week,Chuck works 45 hours but is idle for 2 hours due to material shortages.The company treats all fringe benefits as part of manufacturing overhead.The allocation of Chuck's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A)Option A
B)Option B
C)Option C
D)Option D

Question 17

If scheduling delays occur,and a particular job must be worked on during an overtime period,the overtime premium cost would most likely be charged to:

A)the job worked on during the overtime period.
B)manufacturing overhead.
C)finished goods inventory.
D)work in process.

Question 18

Chuck is a quality inspector on the assembly line of a manufacturing company. He is paid $16 per hour for regular time and time and a half for all work in excess of 40 hours per week. He is classified as a direct labor worker.

-Chuck works 47 hours in a given week but is idle for 3 hours during the week due to equipment breakdowns.The allocation of Chuck's wages for the week between direct labor cost and manufacturing overhead cost would be:

A)Option A
B)Option B
C)Option C
D)Option D

Question 19

Wendy works on the assembly line of a manufacturing company where she installs a component part for one of the company's products. She is paid $20 per hour for regular time and time and a half for all work in excess of 40 hours per week.

-Wendy's employer offers fringe benefits that cost the company $3 for each hour of employee time (both regular and overtime).During a given week,Wendy works 42 hours but is idle for 3 hours due to material shortages.The company treats all fringe benefits relating to direct labor as added direct labor cost and the remainder as part of manufacturing overhead.The allocation of Wendy's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A)Option A
B)Option B
C)Option C
D)Option D

Question 20

Sally Smith is employed in the production of various electronic products,and earns $8 per hour.She is paid time-and-a-half for work in excess of 40 hours per week.During a given week she worked 45 hours and had no idle time.How much of her week's wages would be charged to manufacturing overhead?

A)$60
B)$20
C)$40
D)$0