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.
Correct Answer:
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