Financial budgets: wages and expense budgets Nathaniel’s Motor Shop does major repair work on…
Financial budgets: wages and expense budgets Nathaniel’s Motor Shop does major repair work on automobile engines. The major cost in the shop is the wages of the mechanics. The shop employs nine mechanics who are paid $750 each for working a 40-hour week. The workweek consists of five days of eight hours each. Employees actually work seven hours each day because they are given one hour of breaks each day. They are highly skilled and valued by their employer, so these mechanics are paid whether or not there is work available for them to do. They are also paid $30 for every overtime hour or partial overtime hour they work.
The machine shop industry estimates that for every mechanic hour actually worked in a shop like this, the employee consumes about $25 of variable support items, such as lubricants, tool parts, and electricity.
The motor shop estimates that the following work will be available each week during the next 10 weeks:
Develop a weekly budget of mechanic wages and variable support costs.