Question

Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, calculate hourly rates and overtime rates as follows:

1.	Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate).
2.	If the third decimal place is 5 or more, round to the next higher cent.
3.	If the third decimal place is less than 5, simply drop the third decimal place.
	Examples:	Monthly rate $1,827 Weekly rate ($1,827 × 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 × 1.5 = $15.81

Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.

Example 2-9

John Dilcher is paid an hourly rate of $18.50 per hour, and he worked 49 hours this week. His gross pay is:

40 hours × $18.50	=	$740.00	regular earnings
9 hours × $27.75 ($18.50 × 1.5)	=	249.75	overtime earnings
Total gross pay	=	$989.75

The wages and hours information for five employees of Somja Enterprises for the week ended April 7 is given below. Employees work a standard 40-hour workweek and are paid time and one-half for all hours over 40 in each workweek.

If required, round your answers to two decimal places and use the rounded answers in subsequent computations. Round your final answers to the nearest cent.

a. For each employee, compute the regular earnings, overtime rate, overtime earnings, and total gross earnings.

b. Compute the total gross earnings for all employees.

Employee	Hours Worked	Regular Hourly Wage Rate	Regular Earnings	Overtime Rate	Overtime Earnings	Total Gross Earnings
Wilson, H.	43	$11.90	$	$	$	$
Aha, C.	42	14.20
Shoup, K.	47	13.90
Carlyn, D.	41½	10.70
McMurray, J.	45	17.10
					(b) Total gross earnings	$

Answer 1

Solution:

Given:

Overtime rate will be regular hourly rate + One Half for the time worked over 40 hours
i.e. 1.5 times the regular wage rate.

Computation of earnings by every employee, Gross Earnings.

Employee	Hours Worked	Regular Rate	Regular Earnings (Hours Worked*Regular Rate)	Overtime Rate (Regular Rate*1.5)	Overtime Earnings (Hours Worked above 40*Overtime Rate)	Total Gross Earnings (Regular Earnings+Overtime Earnings)
Wilson, H.	43	$11.90	511.7 (43*11.90)	17.85 (11.90*1.5)	53.55 {(43-40)*17.85}	565.25 (511.7+53.55)
Aha, C.	42	14.20	596.4 (42*14.20)	21.3 (14.20*1.5)	42.6 {(42-40)*21.3}	639 (596.4+42.6)
Shoup, K.	47	13.90	653.3 (47*13.9)	20.85 (13.90*1.5)	145.95 {(47-40)*20.85}	799.25 (653.3+145.95)
Carlyn, D.	41.5	10.70	444.05 (41.5*10.70)	16.05 (10.70*1.5)	24.075 {(41.5-40)*16.05)	468.125 (444.05+24.075)
McMurry, J.	45	17.10	769.5 (45*17.10)	25.65 (17.10*1.5)	128.25 {(45-40)*25.65}	897.75 (769.5+128.25)
					(b)Total Gross Earnings of all employees	3369.37