Question 24
- Mustafa earns $45 per hour for an 8 hour day
- Overtime is time-and-a-half for the first two hours and double time after that
- 5% bonus for days with extreme heat
(a) 10 h day with extreme heat
Regular pay = 8 h @ $45 = 8 x 45 = $360
Overtime = 2 h @ 1.5 x $45 = 2 x 1.5 x 45 = $135
Ordinary pay for the day = 360 + 135 = $495
Extreme heat bonus = 5% x 495 = $24.75
Total pay for the day = ordinary pay + bonus = 495 + 24.75 = $519.75
(b) Week with two 9 h days, three 12 h days, and no extreme heat
Regular pay = $360 per day, from above
Overtime on 9 h days = 1 x 1.5 x 45 = $67.50
Overtime on 12 h days = 2 h @ 1.5 x $45 AND 2 h @ 2 x $45 = 2 x 1.5 x 45 + 2 x 2 x 45 = 135 + 180 = $315
Ordinary pay for the week = Regular pay + overtime = 5 x 360 + 2 x 67.50 + 3 x 315 = 1800 + 135 + 945 = $2,880
The solutions provided use an alternative method whereby overtime is treated more than the actual number of hours, but counted at the standard rate (as opposed to the above, where overtime is counted as the actual hours worked, but paid at a higher rate). Under this approach, you count the number of hours of pay he receives knowing that this is higher than the actual number of hours he worked because overtime is now being treated as extra hours at his standard rate instead of a higher rate for those hours. On this basis:
Working a 9 h day means being paid for 8 h ordinary plus 1 h overtime (1 h at 1.5x) = 8 + 1 x 1.5 = 9. 5 h
Working a 12 h day means being paid for 8 h ordinary plus 4 h overtime (2 h at 1.5x, 2 h at 2x) = 8 + 2 x 1.5 + 2 x 2 = 15 h
Hours of pay for the week = 2 x 9 h day + 3 x 12 h day = 2 x 9.5 + 3 x 15 = 19 + 45 = 64 h
Ordinary pay = 64 x 45 = $2,880.