Question
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
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.
a) Becky works 42 hours during a week in which there was no idle time. Compute total wages, direct labour and manufacturing overhead.
b) Becky works 46 hours in a given week but is idle for 4 hours during the week due to equipment breakdowns. Compute total wages, direct labour and manufacturing overhead.
c 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. Compute the allocation of Becky's wages and fringe benefits (total wages) for the week between direct labor cost and manufacturing overhead.
d. 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. Compute the allocation of Becky's wages and fringe benefits (total wages) for the week between direct labor cost and manufacturing overhead.
regerding to your questions for more information about
1) what are the components of manufacturing overhead?
2) How it should be calculated ?
here you go !
direct labour are the hours that the labour is working multiplied by the basic wages.
other than the direct hours and basic wages, others are all classified under manufacturing overhead, for example i) overtime premium - the extra wages (excluding basic pay) earned for the extra hours (excluding the basic hours) ii) idle hours - hours the employee is not working iii) fringe benefits
note: this question from cost and management
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