Question

Ralph Johnson is paid $50 an hour for straight−time and $70 an hour for overtime. One week he worked 49 ​hours, which included 99 hours of​ overtime, and 77 hours of idle time caused by material shortages. What is the direct labor cost incurred to the​ company?

Answer 1

the direct labor cost incurred to the​ company = $9,380

Explanation

the direct labor costs incurred to the​ company are all the costs which are associated with the products produced and are paid for the hours worked for producing such products.

These includes normal hours worked and overtime hours worked.

Note: idle time costs are not included in direct labour costs.

Given,

Ralph Johnson is paid $50 an hour for straight−time and $70 an hour for overtime.

One week he worked 49 ​hours of straight-time,
99 hours of​ overtime.

Total direct labour costs

Straight-time costs = $2,450
($50 x 49hours)

Overtime costs = $6,930
($70 x 99hours)

Total direct labour costs = $9,380

Hence, the direct labor cost incurred to the​ company = $9,380