6 Marrell is employed on the assembly line of a manufacturin

6. Marrell is employed on the assembly line of a manufacturing company where she assembles a component part for one of the company\'s products. She is paid S16 per hour for regular time and time and a half for all work in excess of 40 hours per week. Marrell works 50 hours in a given week but is idle for 4 hours during the week due to equipment breakdowns. The allocation of Marrell\'s wages for the week as between direct labor cost and manufacturing overhead cost would be: Manufacturing Overhead $144 $64 $160 $80 Direct Labor $736 B. $816 C. $640 D. $800 144

Solution

The allocation of marrell\'s wages is for the week between direct labor cost and Manufacturing overhead cost is as follows:

Direct labor = 46*16   = $736

Variable overhead cost = 4*16 + 10*8 = $144

Answer - A. $736                  $144

In the given case the wages for the breakdown period and the overtime premium is charged to variable overhead cost.