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Difficulty: MediumWages, Salaries, and Commissions

A custom cabinetry builder is paid an hourly wage of $24\$24 for a standard 4040-hour workweek. For any hours worked beyond 4040 in a single week, they receive "time-and-a-half" overtime pay. Last week, the builder worked a total of 5252 hours and received an additional $150\$150 material handling bonus. What were the builder's total gross earnings for the week?

  1. $1,542\$1,542Answer
  2. B
    $1,398\$1,398
  3. C
    $2,022\$2,022
  4. D
    $582\$582

Answer

The total gross earnings are $1,542\$1,542.
The correct answer accurately separates the total hours into regular and overtime components, applies the respective rates to each portion, and includes the fixed material handling bonus to find the total gross earnings.

Step-by-Step Solution

1
Calculate the base pay for the standard workweek.
40 hours×$24/hour=$96040 \text{ hours} \times \$24/\text{hour} = \$960
The standard hourly rate only applies to the first 40 hours worked in the week.
2
Determine the number of overtime hours and the overtime pay rate.
52−40=12 overtime hours52 - 40 = 12 \text{ overtime hours}. The overtime rate is $24×1.5=$36/hour\$24 \times 1.5 = \$36/\text{hour}.
Overtime is paid at time-and-a-half for any hours beyond the standard 40.
3
Calculate the total overtime pay.
12 hours×$36/hour=$43212 \text{ hours} \times \$36/\text{hour} = \$432
This accounts for the compensation earned during the extra hours.
4
Sum all earnings to find the total gross pay.
$960 (base)+$432 (overtime)+$150 (bonus)=$1,542\$960 \text{ (base)} + \$432 \text{ (overtime)} + \$150 \text{ (bonus)} = \$1,542
Total gross earnings must include regular pay, overtime pay, and any additional bonuses.

Key Concept

Wages, Salaries, and Commissions
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Topics

Wages, Salaries, and Commissions

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