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Helena Montana is employed by Northern Laboratories and is directly involved in preparing the company's leading antibiotic drug. Helena's basic wage rate is $22 per hour. The company pays its employees time and a half (i.e. 150%) for any work in excess of 40 hours per week. In addition, the Lab contributes $10 per hour towards Helena's fringe benefits. In the second week of February, Helena worked 47 hours, of which 3 hours were idle time due to the breakdown of lab equipment.
For fringe benefits associated with direct labor hours. Northern Laboratories treats 70% of fringe benefits costs as direct labor cost. The remaining 30% along with total fringe benefit costs associated with labor hours not considered direct is treated as manufacturing overhead. Calculate how much of Helena Montana's compensation will be classified as overhead cost for the second week of February.
A. $162.00
B. $305.00
C. $129.00
D. $172.00
E. $301.00
Please show your work and, if possible, explain what formulas or concepts are being applied.
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