Note: In this chapter and in all succeeding work throughout the course, unless i

Question

Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, calculate hourly rates and overtime rates as follows:

Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.

Example 2-3

Alfred Sims is a tipped employee who normally works a 40-hour week and averages over $300 in tips each week. If his employer takes the maximum tip credit against the minimum wage ($5.12 per hour), in a week in which Alfred worked 44 hours, the restaurant would pay him:

Hunter Sobitson, a waiter at the Twentieth Hole restaurant, worked 43½ hours this week and collected over $650 in tips. The restaurant uses the full tip credit against the minimum wage and pays Sobitson the minimum required for tipped employees.

Determine his gross pay from the restaurant. Round your overtime rate to two decimal places and use the rounded amount in subsequent computations. Round your final answers to the nearest cent.

1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the over-time rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, simply drop the third decimal place. Examples: Monthly rate $1,827
Weekly rate ($1,827 × 12)/52 = $421.615 rounded to $421.62
Hourly rate $421.62/40 = $10.540 rounded to $10.54
O.T. rate $10.54 × 1.5 = $15.81

Explanation / Answer

pay for 40 hours = 40 hours x $2.13 = $85.20

overtime rate = $10.88 - $5.12 = $5.76

b) pay for overtime hours = (43.5 -40) * 5.76 = 20.16

Gross pay = 85.20 + 20.16

= 105.36

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