Question

For a 14-person team, how does the actual weekly labour cost compare to the targeted labour cost?
– Regular Rate $15.00/hr
– Overtime Rate $22.50/hr
– Targeted Labour Cost $12,000/wk
– Labour Hours Needed 800/wk
– Any hour worked over 40 hrs/wk must be paid overtime rate

Answer 1

Answer:

d) any hour worked over 40 hrs/ wk must be paid overtime rate

Answer 2

Answer:

240 hours

Step-by-step explanation:

Concept

• Target costing is a system under which a company plans in advance for the price points, product costs, and margins that it wants to achieve for a new product.

Given

Regular Rate $15.00/hr

Overtime Rate $22.50/hr

Targeted Labour Cost $12,000/wk

Labour Hours Needed 800/wk

Solution

Overtime means each employee can work beyond the input of 40 hrs. Per week.

Labor requirement = 800 hrs.

14 men labor capacity = 14× 40 = 560 hrs.

So overtime hours required = 800-560=240 hrs

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