Donny is employed by ABC Limited. His normal working week is 46 hours (Monday to Friday). The number of hours worked by Donny for a week in March 2021 is: Sunday: 4 hours Monday: 10 hours Tuesday: 11 hours Wednesday: 9 hours Thursday: 11 hours Friday: 10 hours Saturday. 4 hours Additional information: 1. Donny is remunerated as follows: Normal wage rate R110 per hour Overtime (Monday to Saturday) 1.5 times the normal rate Overtime (Sunday) Double the normal rate 2. Pension fund is calculated on normal pay as follows: Employee's deduction 7.5% Employer's contribution 9% 3. Medical aid fund: Employee's deduction R1 200 per month Employer's contribution R1 200 per month 4. Income tax is calculated at 20% of the taxable income (i.e. gross salary less pension deduction). The total labour cost to ABC Limited in respect of Donny for the week in March 2021 is
Donny is employed by ABC Limited. His normal working week is 46 hours (Monday to Friday). The number of hours worked by Donny for a week in March 2021 is: Sunday: 4 hours Monday: 10 hours Tuesday: 11 hours Wednesday: 9 hours Thursday: 11 hours Friday: 10 hours Saturday. 4 hours Additional information: 1. Donny is remunerated as follows: Normal wage rate R110 per hour Overtime (Monday to Saturday) 1.5 times the normal rate Overtime (Sunday) Double the normal rate 2. Pension fund is calculated on normal pay as follows: Employee's deduction 7.5% Employer's contribution 9% 3. Medical aid fund: Employee's deduction R1 200 per month Employer's contribution R1 200 per month 4. Income tax is calculated at 20% of the taxable income (i.e. gross salary less pension deduction). The total labour cost to ABC Limited in respect of Donny for the week in March 2021 is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Donny is employed by ABC Limited. His normal working week is 46 hours (Monday to Friday). The
number of hours worked by Donny for a week in March 2021 is:
Sunday: 4 hours
Monday: 10 hours
Tuesday: 11 hours
Wednesday: 9 hours
Thursday: 11 hours
Friday: 10 hours
Saturday: 4 hours
Additional information:
1. Donny is remunerated as follows:
Normal wage rate R110 per hour
Overtime (Monday to Saturday) 1.5 times the normal rate
Overtime (Sunday) Double the normal rate
2. Pension fund is calculated on normal pay as follows:
Employee's deduction 7.5%
Employer's contribution 9%
3. Medical aid fund:
Employee's deduction R1 200 per month
Employer's contribution R1 200 per month
4. Income tax is calculated at 20% of the taxable income (i.e. gross salary less pension deduction).
The total labour cost to ABC Limited in respect of Donny for the week in March 2021 is
O A. R8775.4
B. R7 755
O C. none of the above
O D. R8 320
Expert Solution
Step 1
Working to calculate Total Labour cost to ABC Ltd in respect of Donny for the week in March 2021:
1. Donny Remuneration:
Normal working week (Monday to Friday) = 46hours /5 days = 9.2 hours per day
Calculation of Overtime:
| Days | No. of hours worked | Overtime worked | Wage Rate | Overtime (R) |
| Sunday | 4 | 4 | R220 per hour | 880 |
| Monday | 10 | 0.8 | R165 per hour | 132 |
| Tuesday | 11 | 1.8 | R165 per hour | 297 |
| Wednesday | 9 | - | R165 per hour | - |
| Thursday | 11 | 1.8 | R165 per hour | 297 |
| Friday | 10 | 0.8 | R165 per hour | 132 |
| Saturday | 4 | 4 | R165 per hour | 660 |
| Total Overtime cost | 2,398 |
Normal Hours = 45.80 hours * R110 per hour = R5,038
Plus, Overtime Cost = R2,398
Total Remuneration Cost = R7,436
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