Deck 19: Further Classification of Labor Costs

Question 1

A direct labor worker at Langill 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 49 hours in a given week but is idle for 4 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.

Answer 1

Question 2

Bob 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.
Bob's employer offers fringe benefits that cost the company $4 for each hour of employee time (both regular and overtime). During a given week, Bob 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 Bob's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Answer 2

C

Question 3

The cost associated with idle time should be:

A) included as part of direct labor cost.
B) treated as part of manufacturing overhead.
C) added directly to cost of goods sold for the period.
D) included as part of selling and administrative expenses.

Answer 3

B

Question 4

Becky 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 $16 per hour for regular time and time and a half for all work in excess of 40 hours per week.
Becky works 42 hours during a week in which there was no idle time. The allocation of Becky's wages for the week between direct labor cost and manufacturing overhead cost would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 5

A direct labor worker at Vorwald 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 $6 for each hour of employee time (both regular and overtime). Last week this employee worked 43 hours but was idle for 4 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 6

Becky 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 $16 per hour for regular time and time and a half for all work in excess of 40 hours per week.
Becky works 46 hours in a given week but is idle for 4 hours during the week due to equipment breakdowns. The allocation of Becky's wages for the week between direct labor cost and manufacturing overhead cost would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 7

A direct labor worker at Gallet Corporation is paid $20 per hour for regular time and time and a half for all work in excess of 40 hours per week. This employee works 44 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 8

The cost of fringe benefits given to direct labor workers is best classified as a period cost.

Question 9

Bob 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.
Bob works 48 hours in a given week but is idle for 4 hours during the week due to equipment breakdowns. The allocation of Bob's wages for the week between direct labor cost and manufacturing overhead cost would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 10

Bill Harris works on the assembly line of the Boothe Company and earns $10 per hour. He is paid time-and-a-half for work in excess of 40 hours per week. During a given week he worked 43 hours and had no idle time. How much of his week's wages would be charged to manufacturing overhead?

A) $15
B) $45
C) $30
D) $0

Question 11

Becky 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 $16 per hour for regular time and time and a half for all work in excess of 40 hours per week.
Becky's employer offers fringe benefits that cost the company $3 for each hour of employee time (both regular and overtime). During a given week, Becky 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 Becky's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 12

A direct labor worker at Santana 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 $6 for each hour of employee time (both regular and overtime). Last week this employee worked 43 hours but was idle for 4 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.

Question 13

Idle time for direct labor factory workers is classified as an indirect manufacturing cost.

Question 14

During the first week of April, Gillian worked a total of 50 hours and had no idle time. Gillian is paid $15 per hour for regular time, and is paid time-and-a-half for all hours in excess of a 40 hour week. The amount of Gillian's wages that should be charged to direct labor for the week is:

A) $600
B) $225
C) $750
D) $975

Question 15

Bob 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.
Bob works 44 hours during a week in which there was no idle time. The allocation of Bob's wages for the week between direct labor cost and manufacturing overhead cost would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 16

Robert Smith earns $6 per hour. For each hour over 40 he works, he is paid time-and-a-half. During a given week he worked 45 hours and had no idle time. How much of his weekly wages would be charged to the manufacturing overhead account?

A) $30
B) $45
C) $15
D) $0

Question 17

Bob 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.
Bob's employer offers fringe benefits that cost the company $4 for each hour of employee time (both regular and overtime). During a given week, Bob 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 Bob's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 18

Becky 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 $16 per hour for regular time and time and a half for all work in excess of 40 hours per week.
Becky's employer offers fringe benefits that cost the company $3 for each hour of employee time (both regular and overtime). During a given week, Becky 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 Becky's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:

A) Choice A
B) Choice B
C) Choice C
D) Choice D