Question

Lauren Clark works for a pottery shop. She works 40-hour weeks (5 days) and gets paid $25 per hour. If she exceeds her normal 40 hours, she gets paid time and a half. On the first week of the year, she worked a total of 38 hours but got paid 46 hours because the 1st day of the year the pottery shop was closed but she still got paid for the day. The following 4 days, she had 1.5 hours of overtime per day. How much of her pay would be considered direct labor

Answer 1

Answer:

D. $950; 425

Explanation:

Remember, direct labor refers to the actual time spent on working such as using machinery, performing tasks that leads to the production of products or services. Indirect labor involves time activites that do not involve any production of products or services.

First, direct pay:

• 38 hours of work x  $25 = $950

$950

Indirect pay;

• 8 hours from the 46 hours she was paid (8 x $25) = $200
• For 4 days she had 1.5 hours of overtime per day (4 x 1.5 x 37.5) = $225.

Total = $425

Note: by saying if she exceeds her normal 40 hours, she gets paid time and a half implies 1.5 * $25  ($37.5)