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An employee works 45 hours in a week at $25 per hour. Assuming overtime is paid at time-and-a-half for hours over 40, what is the gross pay?

Correct Answer

B) $1,187.50

Regular pay: 40 hours × $25 = $1,000. Overtime pay: 5 hours × $37.50 (time-and-a-half) = $187.50. Total gross pay = $1,000 + $187.50 = $1,187.50.

Answer Options
A
$1,125.00
B
$1,187.50
C
$1,000.00
D
$1,250.00

Why This Is the Correct Answer

Option B correctly calculates gross pay by separating regular and overtime hours. The first 40 hours are paid at the regular rate of $25/hour ($1,000), while the 5 overtime hours are paid at time-and-a-half ($37.50/hour = $187.50). Adding these together gives the total gross pay of $1,187.50.

Why the Other Options Are Wrong

Option A: $1,125.00

This answer ($1,125) appears to calculate overtime incorrectly, possibly using $25 for overtime hours instead of the required time-and-a-half rate of $37.50.

Option C: $1,000.00

This answer ($1,000) only accounts for regular pay and completely ignores the overtime premium for the 5 hours worked beyond 40 hours.

Option D: $1,250.00

This answer ($1,250) incorrectly calculates by paying all 45 hours at the overtime rate, rather than separating regular hours (40) from overtime hours (5).

Memory Technique

Remember '40 and 1.5' - after 40 hours, multiply the hourly rate by 1.5 for overtime calculation

Reference Hint

Labor law section or employment regulations chapter covering Fair Labor Standards Act (FLSA) overtime requirements

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