Chapter 2, Problem 11PB

Costa, Inc., recently converted from a 5-day, 40-hour workweek to a 4-day, 40-hour workweek, with overtime continuing to be paid at one and one-half times the regular hourly rate for all hours worked beyond 40 in the week. In this company, time is recorded under the continental system, as shown on the time card on the following page.

Barbara Bansta is part of the Group B employees whose regular workweek is Tuesday through Friday. The working hours each day are 800 to 1200; 1230 to 1630; and 1800 to 2000. The company disregards any time before 800, between 1200 and 1230, and between 1630 and 1800, and permits employees to ring in up to 10 minutes late before any deduction is made for tardiness. Deductions are made to the nearest ¼ of an hour for workers who are more than 10 minutes late in ringing in.

Refer to the time card and compute:

1. a. The daily total hours ..........................................................................    ___________
2. b. The total hours for the week ...............................................................    ___________
3. c. The regular weekly earnings ................................................................    $___________
4. d. The overtime earnings (company rounds O.T. rate to 3 decimal places)    ___________
5. e. The total weekly earnings .....................................................................    $__________

To determine

Calculate the daily total hours for Employee B.

Explanation of Solution

Calculate the daily total hours for Employee B.

Tuesday
Session	Time	Hours worked
Morning	755 to 1200 (see Note 1)	4 hours
Afternoon	1230 to 1630	4 hours
Evening	1801 to 2002	2 hours, 1 minute
Total hours worked		10.01(rounded to 10 hours)

Table (1)

Note 1: In the morning session, Employee B worked from 755 to 1200. The 5 minutes he worked before 800 are forbidden time, and will not be considered as working hour.

Wednesday
Session	Time	Hours worked
Morning	750 to 1202 (see Note 1)	4 hours, 2 minutes
Afternoon	1231 to 1631 (see Note 2)	3 hours, 59 minutes
Evening	1809 to 2001	1 hour, 52 minutes
Total hours worked		9 hours, 53 minutes (rounded to 10 hours)

Table (2)

Note 1: In the morning session, Employee B worked from 750 to 1202. He worked for 10 minutes before 800, and 2 minutes after 1200. The time before 800 and the time after 1200 are forbidden time, and will not be considered as working hour.

Note 2: In the afternoon session, he worked from 1231 to 1631. He worked for 1 minute after1630 which is forbidden time, and will not be considered as working hour.

Thursday
Session	Time	Hours worked
Morning	825 to 1200 (see Note 1)	3 hours, 35 minutes
Afternoon	1230 to 1630	4 hours
Evening	1802 to 2005	2 hours 3 minutes
Total hours worked		9 hours 38 minutes (rounded to 9.30 hours)

Table (3)

Note 1: In the morning session, Employee B worked from 825 to 1200. That means, he came 25 minutes late. So, as per the provisions, the company will deduct $\frac{1}{4}$ of an hour for being late for more than 10 minutes. Employee B came 25 minutes late. So, $\frac{1}{2}\text{hour}$ salary should be deducted.

Friday
Session	Time	Hours worked
Morning	759 to 1203 (see Note 1)	3 hours, 59 minutes
Afternoon	1238 to 1635 (see Note 2)	3 hours, 52 minutes
Evening	1800 to 2000	2 hours
Total hours worked		9 hours, 51 minutes (rounded to 10 hours)

Table (4)

Note 1: In the morning session, Employee B worked from 759 to 1203. He worked for 1 minute before 800 and 3 minutes after 1200. The time before 800 and the time after 1200 are forbidden time, and will not be considered as working hour.

Note 2: In the afternoon session, he worked from 1238 to 1635. He worked for 5 minutes after 1630. The time after 1630 is considered as forbidden time, and will not be considered as working hour.

Saturday
Session	Time	Hours worked
Morning	800 to 1201 (see Note)	4 hours
Afternoon
Evening
Total hours worked		4 hours

Table (5)

Note 1: In the morning session, Employee B worked from 800 to 1201. He worked for 1 minute after 1,200 which is forbidden time, and will not be considered as working hour.

To determine

Calculate the total number of hours worked for the week by Employee B.

Explanation of Solution

Calculate the total number of hours worked for the week by Employee B.

$\begin{array}{c}\text{Total hours worked }=\text{Sum of total number of hours worked from Tuesday to Saturday}\\ =\text{10}\text{hours+10}\text{hours}\text{+}\text{9}\text{hours}30\text{minutes}\text{+}\text{10}\text{hours}\text{+}\text{4}\text{hours}\\ =\text{ 43}\text{hours}30\text{minutes}\end{array}$

Hence, the total number of hours worked for the week by Employee B is 43 hours 30 minutes.

To determine

Calculate the regular weekly earnings for Employee B.

Explanation of Solution

Regular earnings: Generally, employees in a firm work in pre-determined hours (40 hours) and get paid accordingly. The amount of earnings that is calculated based predetermined hours is called as regular earnings of an employee.

Calculate the regular weekly earnings for Employee B.

$\begin{array}{c}\text{Regular weekly earnings = Regular hours worked }\times \text{Hourly wage rate}\\ \text{=40 hours }\times \text{\$13}\text{.85 per hour}\\ =\$554\end{array}$

Hence, the regular weekly earnings for Employee B is $554.

To determine

Calculate the overtime earnings for Employee B.

Explanation of Solution

Overtime Earnings: If an employee works more than the stipulated working hours (more than 40 hours) of the employment then, the employee is mandated to get paid one and a half times more than the normal working pay. This one and half times can be termed as overtime premium or earnings.

Calculate the overtime earnings for Employee B.

Step 1: Calculate the number of overtime hours worked.

$\begin{array}{c}\text{Overtime hours =Total hours worked in a week}-\text{Normal hours per week}\\ \text{= 43}\text{hours}30\text{minutes }-40\text{hours}\\ =\text{3hours}30\text{minutes}\end{array}$

Step 2: Calculate the overtime earnings:

$\begin{array}{c}\text{Overtime earnings = Overtime hours worked }\times \text{Overtime wage rate}\\ =\text{\$20}\text{.775}\times 3\text{ hours 30 minutes}\\ =\text{\$72}\text{.71}\end{array}$

Hence, the overtime earnings for Employee B is $72.71.

To determine

Calculate the total weekly earnings for Employee B.

Explanation of Solution

Total Earnings: It is the amount of employee’s gross earnings during a period. It includes regular earnings plus overtime earnings or any bonus or commission if applicable.

Calculate the total weekly earnings for Employee B.

$\begin{array}{c}\text{Total Earnings = Regular}\text{earnings}\text{+}\text{}\text{Overtime}\text{earnings}\\ \text{=}\text{\$554}+\$72.71\\ =\text{\$626}\text{.71}\end{array}$

Hence, the total weekly earnings for Employee B is $626.71.