Highlander Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 48 hours during a week in January. The employee earns $12 per hour for a 40-hour week, and overtime is paid after 40 hours. For additional hours, the employee is paid an overtime rate of

$18 per hour. The employee’s time was spent as follows:

Required:
1. Calculate the total cost of the employee’s wages during the week described above.
2. Determine the portion of this cost to be classified in each of the following categories:

a. Direct labor

b. Manufacturing overhead (idle time)

c. Manufacturing overhead (overtime premium)

d. Manufacturing overhead (indirect labor)

Transcribed Image Text:

Regular duties involving cutting out knife handles... General shop cleanup duties............ Idle time due to power outage.. 38 hours 9 hours 1 hour