five workers work 10 hrs a day six days a week for minimum wage 5.15 ..they make 500 shirts in one week ...when paid overtime...what are labor costs for each shirt?
The labor cost per shirt will be the total amount spent on labor in a week divided by 500.
(a) With no overtime differential pay we have total labor costs of :
`(5)(10)(6)(5.15)=$1545` so the labor cost per shirt is $3.09
(b) If there is overtime differential of time and a half for hours over forty hours labor costs are:
`(5)(40)(5.15)+5(20)(1.5)(5.15)=1030+772.5=$1802.50` , so the labor cost per shirt would be $3.61
* Of course federal minimum wage is higher than $5.15 now
** Many workplaces have different definitions for full-time and overtime hours. Also, many have different differentials -- time and a half for the first 10 hours of overtime and double time for overtime hours beyond that, or extra incentive for working nights or weekends, etc... The given information is insufficient to decide how the workers are paid, so when answering this type of question make your assumptions known e.g. assuming overtime paid for hours over 40 hours at time and a half.