Question

Nadia, John, Saba and Kumar are working together on a project. These are the data for each: Nadia: 60 hours, overhead rate 75%, personal time 10%, $20/hr John: 80 hours, overhead rate 55%, personal time 12%, $40/hr Saba: 80 hours, overhead rate 75%, personal time 10%, $36/hr Kumar: 40 hours, overhead rate 55%, personal time 12%, $20/hr Who has the highest direct labour costs?

Answer 1

John has the highest direct labor costs with $3200.

Step-by-step explanation:

To determine who has the highest direct labor costs, we need to calculate the labor costs for each person.

The costs can be calculated as -

Nadia's labor cost = 60 hours x $20/hr = $1200

John's labor cost = 80 hours x $40/hr = $3200

Saba's labor cost = 80 hours x $36/hr = $2880

Kumar's labor cost = 40 hours x $20/hr = $800

Comparing the labor costs, we can see that John has the highest direct labor costs with $3200.

Answer 2

John has the highest direct labour costs of $1548.80. Obtain the number of hours worked by multiplying the number of hours available by the percentage of time that is not personal time. Obtain the proportion of overhead rate by multiplying the percentage of overhead rate by the rate in dollars per hour. Finally, multiply the two products obtained to get direct labour costs for each individual.