Debra works on the assembly line of a manufacturing company where she installs a

Question

Debra 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. Debra'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 materials shortages. The company treats all fringe benefits relating to direct labor as added direct labor cost and the remainder as part of manufacturing overhead. The allocation of Debra's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be which of the following?

a. Direct Labor: $624 / Manufacturing Overhead: $190
b. Direct Labor: $741 / Manufacturing Overhead: $73
c. Direct Labor: $688 / Manufacturing Overhead: $126
d. Direct Labor: $672 / Manufacturing Overhead: $142

Explanation / Answer

c. Direct labor $688/Manufacturing overhead $126

weekly hours =40 hours

hourly rate =$16

overtime =time and half for all work in excess

Becky worked for 42 hours

so his direct labor is

for 40 hours @16 per hour= 40*16=$640

for 2 hours @$24 per hour= 2*24 =$48

=688

Fringe benefits @$3 per employee hour

so for 42 hours the benefits=42*3=$126

So the answer is C

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