Your Employer Has Asked You to Start Working Overtime and Has

question 142

Multiple Choice

Your employer has asked you to start working overtime and has offered to pay $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual $15 per hour. In terms of dollars, what is the marginal benefit of working each hour of overtime?

• A) Zero
• B) $15.00
• C) $3.00
• D) $18.00

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Definitions:

Bottlenecks

Refer to points of congestion in a production system that significantly slow down the overall process.

Variable Cost Concept

A concept used in applying the cost-plus approach to product pricing in which only the variable costs are included in the cost amount to which the markup is added.

Fixed Manufacturing Costs

Expenses related to the production process that do not vary with the volume of production, such as salaries of supervisors and rent of the factory.

Markup

The amount added to the cost of goods to cover expenses and generate profit.