Payroll accounting, has to do with "piece-rate employee overtime":The problem is attached. My question is how is "gross earnings" of $1021.01 derived? Chapter 3Gross Pay Computation127Piece-Rate Employee OvertimePiece-rate workers are eligible for overtime on a similar basis to hourly nonexempt employ-ees. However, because they are paid on a piece-rate basis, the overtime computation is basedon the number of pieces completed and the total number of productive hours worked duringthe consecutive seven-day period.EXAMPLE: PIECE-RATE EMPLOYEE OVERTIMEEdmund Dennis is a piece-rate employee at Snowy Day Sculptures in Terrace Lake,New Mexico. He earns $75 per finished sculpture. During the week of February 27,he worked 48.5 hours and completed 12 sculptures. He is paid minimum wage(i.e., $7.50 per hour) for nonproductive time; during the week of February 27, he had fourhours of nonproductive time. His overtime would be calculated based on the productivetime of 44.5 hours as follows:TaxableNo. ofWages TaxableMILLHWagesforFederal for# ofNo. ofOver- PieceOver-Piece PiecesRegular timeRateRegular timeHours Earnings Earning Earning Earning 401(k) Insurance W/HFICANameM/S #W/H Rate Completed HoursEdmund4.5900.0030.00257.87 1,021.01Dennis1.751240Earnings calculationPiece-rate earnings: 12 x $75 = $900Regular earnings = 4 x $7.50 = $30Overtime = $900/44.5 × 1.5 = $30.33 x 4.5 = $257.87%3D%3D%3D%3DNote that the overtime earnings are computed based on the piece-rate earningsdivided by the total number of productive hours, which yields an effective hourly rate.That hourly rate is multiplied by 1.5 and the number of overtime productive hours to%3Ddetermine the overtime pay.

Piece rate earnings means wages on the basis of pieces produced.

Answered: how is "gross earnings" of $1021.01…

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how is "gross earnings" of $1021.01 derived?

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 10.9EX

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Question

Payroll accounting, has to do with "piece-rate employee overtime":

The problem is attached. My question is how is "gross earnings" of $1021.01 derived?

Chapter 3
Gross Pay Computation
127
Piece-Rate Employee Overtime
Piece-rate workers are eligible for overtime on a similar basis to hourly nonexempt employ-
ees. However, because they are paid on a piece-rate basis, the overtime computation is based
on the number of pieces completed and the total number of productive hours worked during
the consecutive seven-day period.
EXAMPLE: PIECE-RATE EMPLOYEE OVERTIME
Edmund Dennis is a piece-rate employee at Snowy Day Sculptures in Terrace Lake,
New Mexico. He earns $75 per finished sculpture. During the week of February 27,
he worked 48.5 hours and completed 12 sculptures. He is paid minimum wage
(i.e., $7.50 per hour) for nonproductive time; during the week of February 27, he had four
hours of nonproductive time. His overtime would be calculated based on the productive
time of 44.5 hours as follows:
Taxable
No. of
Wages Taxable
MILLH
Wages
for
Federal for
# of
No. of
Over- Piece
Over-
Piece Pieces
Regular time
Rate
Regular time
Hours Earnings Earning Earning Earning 401(k) Insurance W/H
FICA
Name
M/S #W/H Rate Completed Hours
Edmund
4.5
900.00
30.00
257.87 1,021.01
Dennis
1.
75
12
40
Earnings calculation
Piece-rate earnings: 12 x $75 = $900
Regular earnings = 4 x $7.50 = $30
Overtime = $900/44.5 × 1.5 = $30.33 x 4.5 = $257.87
%3D
%3D
%3D
%3D
Note that the overtime earnings are computed based on the piece-rate earnings
divided by the total number of productive hours, which yields an effective hourly rate.
That hourly rate is multiplied by 1.5 and the number of overtime productive hours to
%3D
determine the overtime pay.

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