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Exercise 2-12 Classification of Labour Costs [LO1) Jan Davis is employed by Wesley Limited. Last week...

Question

Exercise 2-12 Classification of Labour Costs [LO1) Jan Davis is employed by Wesley Limited. Last week...

Exercise 2-12 Classification of Labour Costs [LO1) Jan Davis is employed by Wesley Limited. Last week she worked 56 hours ass
Exercise 2-12 Classification of Labour Costs [LO1) Jan Davis is employed by Wesley Limited. Last week she worked 56 hours assembling one of the company's products, Wesley's employees work a 40-hour week and Davis is paid $30 per hour Employees are paid time and a half for any hours worked in excess of the standard 40 hours. Assume the overtime is the result of an overall increase in demand for all products, Required: 1. Allocate Davis's wages for the week between direct labour cost and manufacturing overhead cost. Direct labour cost Manufacturing overhead cost Total wages eamed $ 0

Answers

Solution:

Direct labor cost = 56*$30 = $1,680

Manufacturing overhead costs = (56-40) * $30*50% = $240

Total wages earned = $1,680 + $240 = $1,920


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