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Required information Problem 2-44 Direct and Indirect Labor (LO 2-1, 2-3, 2-5, 2-9) [The following information applies to the questions displayed below.] Highlander Cutlery manufactures
Required information Problem 2-44 Direct and Indirect Labor (LO 2-1, 2-3, 2-5, 2-9) [The following information applies to the questions displayed below.] Highlander Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 45 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: Regular duties involving cutting out knife handles General shop cleanup duties 37 hours 4 hours Idle time due to power outage 4 hours Problem 2-44 Part 1 Required: 1. Calculate the total cost of the employee's wages during the week described above. Total cost of wages 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) Total cost of wages
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