CHAPTER 8 - ACCOUNTING FOR LABOR

TRUE/FALSE

1. True 6. False

2. False 7. True

3. False 8. True

4. False 9. True

5. False 10. True

Problem 1 - Evergreen Company

A) 1. CHARGED TO THE JOB 2. CHARGED TO FACTORY OVERHEAD CONTROL

CHARGED TO JOB CHARGED TO FOC

JOB 401 JOB 402 JOB 401 JOB 402

Direct materials 28,000 37,000 28,000 37,000

Direct labor 18,000 23,000 18,000 23,000

Factory overhead 5,600 11,200 7,600 15,200

Overtime ______ 6,000 ______ ______

Total 51,600 77,200 53,600 75,200

CHARGED TO FOC

Other factory costs P 16,800

Overtime 6,000

Total P 22,800 x 1/3

X 2/3

Problem 2

No. Regular OT Overtime Total

Employee Hrs Rate Pay Hours Rate Premium Pay

Austria 42 36.00 1,512 2 18.00 36.00 1,548

Bautista 43 36.00 1,548 3 18.00 54.00 1,602

DeSantos 44 45.00 1,980 4 22.50 90.00 2,070

Motus 40 30.00 1,200 - - - -

Reyes 40 30.00 1,200 - - -__ -___

TOTAL 7,440 180.00 7,620

b)

1. Payroll 7,620

Accrued payroll 7,620

2. Accrued payroll 7,620

Cash 7,620

3. Work in process (1,512 + 1,548 + 1,980) 5,040

FOC (1,200 + 1,200 + 180 ) 2,580

Payroll 7,620

Page 2

Problem 3 - Norman Company

Employee Guaranteed

Wage

Total pay piece rate Deficiency Total Payroll

Cruz 2,000 (240 x 7.50) 1,800 200 2,000.00

Briones 2,000 (286 x 7.50) 2,145 - 2,145.00

David 2,000 (275 x 7.50) 2,062.50 - 2,062.50

Mendoze 2,000 (240 x 7.50) 1,800 200 2,000.00

Rivera 2,000 (225 x 7.50) 1,687.50 312,50 2,000.00

Tolentino 2,000 (285 x 7.50) 2,137.50 -___ 2,137.50

TOTAL 12,000 11,632.50 712.50 12,345.00

2. Charged to Work in process - 11,632.50

3. Charged to factory overhead account - 712,50

Problem 4 - Ty-Nee Trailer Company

Deductions were computed on the assumption that previous payment of wages were

made without deductions and all deductions are made on the last payment for the

month.

Assume the following amount as previous wages (for the past 3 weeks)

Castro - 5,600

Ardina - 7,500

Brioes - 6,500

David 6,200

Fajardo 5,900

Tomas 5,800

Villas 5,200

REGU LAR PAY OVER TIME PAY TOTAL

Employee HRS. RATE HRS. RATE PAY

Castro 42 40.00 1,680.00 2 20.00 40.00 1,720.00

Ardina 45 50.00 2,250.00 5 25.00 125.00 2,375.00

Briones 48 40.00 1,920.00 8 20.00 160.00 2,080.00

David 48 40.00 1,920.00 8 20.00 160.00 2,080.00

Fajardo 45 40.00 1,800.00 5 20.00 100.00 1,900.00

Tomas 42 40.00 1,680.00 2 20.00 40.00 1,720.00

Villas 40 40.00 1,600.00 - - -__ 1,600.00

TOTAL 12,850.00 625.00 13,475.00

Continuation

Employee Total

Pay

SSS

Prem.

W/holding

Tax

Phil.

Health

Pag-

ibig

Total

Deduct

Net

Pay

Castro 1,720.00 250.00 681.28 87.50 100.00 1,118.78 601.22

Ardina 2,375.00 333.30 614.53 112.50 100.00 1,160.33 1214.67

Briones 2,080.00 283.30 840.93 100.00 100.00 1,324.23 755.77

David 2,080.00 283.30 865.33 100.00 100.00 1,348.63 731.37

Fajardo 1,900.00 266.70 603.38 87.50 100.00 1,057.58 842.42

Tomas 1,720.00 250.00 461.38 87.50 100.00 898.88 821.12

Villas 1,600.00 233.30 438.28 75.00 100.00 846.58 753.42

TOTAL 13,475.00 1899.90 4,505.11 650.00 700.00 7,755.01 5719.99

Castro

Total pay (5,600 + 1,720) 7,320

( 4,167) - - 208.33

3,153 x 15% - 472,95

681.28

Ardina

Total pay (7,500 + 2,375) 9,875

( 7,167) 208.33

2,708 x 15% 406.20

614.53

Briones

Total pay (6,500 + 2,080) 8,580

(7,917) 708.33

663 x 20% 132,60

840.93

David

Total pay (6,200 + 2,080) 8,280

( 7,500) 708.33

780 x 20% 156.00

864.33

Fajardo

Total pay (5,900 +1,900) 7,800

( 5,167) 208.33

2,633 x 15% 394.95

603.38

Tomas

Total pay (5,800 + 1,720) 7,520

( 5,833) 208.33

1,687 x 15% 253.05

461.38

Page 4

Villas

Total pay (5,200 + 1,600) 6,800

(5,267) 208.33

1,533) x 15% 229.95

438.28

2. Payroll 13,475.00

W/holding tax payable 4,505.11

SSS Premiums payable 1,899.90

Phil Health Contributions payable 650.00

Pag-ibig funds contributions payable 700.00

Accrued payroll 5,719.99

Accrued payroll 5,719.99

Cash 5,719.99

Work in process (12,850 1,680) 11,170.00 Factory overhead control (1,680 + 625) 2,305.00

Payroll 13,475

MULTILE CHOICE

1. b 6. a 11. none of the give 2. b 7. d 12. d 3. a 8. d 13. d 4. b. 9. a 14. d 5. a 10. c 15. c

Entry for No 11 should be

Work in process Job 1010 9,748 Work in process Job 1011 1,200 Factory overhead control (1,250 + 37) 1,287

Payroll payable 12,235