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2-43 Labor of Northeast Plastics (NEP) as a machine operator r cost, overtime, and idle time. David Letterma on an hourly basis at a rate
2-43 Labor of Northeast Plastics (NEP) as a machine operator r cost, overtime, and idle time. David Letterma on an hourly basis at a rate of $24 per Frid works in the production department . David, a long-time employee of NEP, is paid hour. David works five 8-hour shifts per week ay (40 hours). Any time David works over and above these 40 hours is considered overtime for which he is paid at a rate of time and a half ($36 per hour). If the overtime falls on David is paid at a rate of double time (S48 per hour). David is also paid an additional $24 per hour for any holidays worked, even if it is part of his regular 40 hours. David is paid his 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." weekends During December David worked the following hours: Hours worked including machine downtime Machine downtime Week 1 Week 2 Week 3 Week 4 50 6.0 46 4.0 3.5 Included in the total hours worked are two company holidays (Christmas Eve and Christmas Day) during Week 4. All overtime worked by David was Monday-Friday, except for the hours worked in Week 3; all of the Week 3 overtime hours were worked on a Saturday. Required: 1. Calculate (a) direct manufacturing labor, (b) idle time, (c) overtime and holiday premium, and (d) total earnings for David in December. Is idle time and overtime premium a direct or indirect cost of the products that David worked on in December? Explain. 2
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