Question

For a 13-person team, how does the actual weekly labor cost compare to the targeted labor cost?

Answer 1

The actual labor cost is $600 over the targeted labor cost.

Given that,

Work done by each person per week = 40 hours

Required labor hours per week = 600 hours

No. of workers in the team = 13

To find,

Actual weekly labor cost = ?

Procedure:

Actual weekly labor cost = No. of workers * no. of hours performed by them

$= 13 * 40$

$= 520 hours$

Given that,

$Regular rate = 15.00 per hour$

$Overtime rate = 22.50 per hour$

Thus,

Actual labor cost = (regular hours worked * regular rate) + (overtime * overtime rate)

$= (520 * 15) + ([600 - 520] * 22.50)$

$= 7,800 + 1,800$

$= 9600$

Targeted Labor cost = $ 9,000 per week

Thus, option C i.e. the actual labor cost is $ 600 over the targeted labor cost.

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