CHAPTER 8 - ACCOUNTING FOR LABOR

TRUE/FALSE
1.
True
2.
False
3.
False
4.
False
5.
False

6.
7.
8.
9.
10.

False
True
True
True
True

Problem 1 - Evergreen Company

A) 1. CHARGED TO THE JOB
2. CHARGED TO FACTORY OVERHEAD CONTROL
CHARGED
JOB 401
28,000
18,000
5,600
______
51,600

Direct materials
Direct labor
Factory overhead
Overtime
Total

CHARGED TO FOC
Other factory costs
Overtime
Total

TO JOB
JOB 402
37,000
23,000
11,200
6,000
77,200
P 16,800
6,000
P 22,800

CHARGED
JOB 401
28,000
18,000
7,600
______
53,600

TO FOC
JOB 402
37,000
23,000
15,200
______
75,200

x 1/3
X 2/3

Problem 2
No.
Employee Hrs
Austria
86
Bautista
88
DeSantos 88
Motus
80
Reyes
80
TOTAL

Rate
36.00
36.00
45.00
30.00
30.00

Regular
Pay
3,096
3,168
3,960
2,400
2,400
15,024

OT
Hours
6
8
8
-

Rate
18.00
18.00
22.50
-

Overtime
Premium
108.00
144.00
180.00
-__
432.00

Total
Employee Pay

WTax

SSS

Pagibig

Austria
3,204
Bautista
3,312
DeSantos 4,140
Motus
2,400
Reyes
2,400
TOTAL 15,456

91.23
102.03
15.85
209.11

109.00
127.20
145.30
90.80
90.80
563.10

96.12
99.36
100.00
72.00
72.00
439.48

PH
100
100
100
100
100
500

Total
Pay
3,204
3,312
4,140
2,400
2,400___
15,456

Total
Deductio
ns
396.35
428.59
345.30
262.80
278.65__
1,711.69

Net
Pay
2,807.65
2,883.41
3,794.70
2,137.20
2,121.35
13,744.31

Withholding tax
Austria

3,204
2,500 704 x 10%

Bautista

3.312
2,500
812 x 10%

Reyes

20.83
70.40
91.23
20.83
81.20
102.03

2,400
2,083
317 x 5%

b)
1.

15.85

Payroll
WTax Payable
SSS Prem. Payable
Pag-ibig Contributions Payable
Philhealth Contributions Payable
Accrued payroll

15,456

2.

Accrued payroll
Cash

13,744.31
13,744.31

3.

Work in process (3,096+3,168+3,960)

FOC (2,400+2,400+432 )
Payroll

10,224
5,232

209.11
563.10
439.48
500.00
13,744.31

15,456

Problem 3 - Norman Company

Employee Guaranteed
Wage
Cruz
2,000
Briones
2,000
David
2,000
Mendoze
2,000
Rivera
2,000
Tolentino
2,000
TOTAL
12,000

Total pay piece rate

(240 x 7.50)
(286 x 7.50)
(275 x 7.50)
(240 x 7.50)
(225 x 7.50)
(285 x 7.50)

1,800
2,145
2,062.50
1,800
1,687.50
2,137.50
11,632.50

2. Charged to Work in process

3. Charged to factory overhead account -

Deficiency
200
200
312,50
-___
712.50

11,632.50
712,50

Total
Payroll
2,000.00
2,145.00
2,062.50
2,000.00
2,000.00
2,137.50
12,345.00

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.
REGU
HRS.
42
45
48
48
45
42
40

Employee
Castro
Ardina
Briones
David
Fajardo
Tomas
Villas
TOTAL

LAR
RATE
40.00
50.00
40.00
40.00
40.00
40.00
40.00

PAY
1,680.00
2,250.00
1,920.00
1,920.00
1,800.00
1,680.00
1,600.00
12,850.00

OVER TIME
HRS. RATE
2
20.00
5
25.00
8
20.00
8
20.00
5
20.00
2
20.00
-

Continuation
Employee
Castro
Ardina
Briones
David
Fajardo
Tomas
Villas
TOTAL

PAY
40.00
125.00
160.00
160.00
100.00
40.00
-__
625.00

Total
SSS W/holding
Phil.
PagPay
Prem.
Tax
Health ibig
1,720.00 250.00
681.28
87.50
100.00
2,375.00 333.30
614.53
112.50
100.00
2,080.00 283.30
840.93
100.00
100.00
2,080.00 283.30
865.33
100.00
100.00
1,900.00 266.70
603.38
87.50
100.00
1,720.00 250.00
461.38
87.50
100.00
1,600.00 233.30
438.28
75.00
100.00
13,475.00 1899.90
4,505.11
650.00
700.00

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

TOTAL
PAY
1,720.00
2,375.00
2,080.00
2,080.00
1,900.00
1,720.00
1,600.00
13,475.00

Total
Net
Deduct Pay
1,118.78 601.22
1,160.33 1214.67
1,324.23 755.77
1,348.63 731.37
1,057.58 842.42
898.88 821.12
846.58 753.42
7,755.01 5719.99

864.33
Fajardo
Total pay (5,900 +1,900) 7,800
( 5,167)
2,633 x 15%

208.33
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
Villas
Total pay (5,200 + 1,600)

2.

6,800
(5,267)
208.33
1,533) x 15% 229.95
438.28

Payroll
W/holding tax payable
SSS Premiums payable
Phil Health Contributions payable
Pag-ibig funds contributions payable
Accrued payroll

13,475.00
4,505.11
1,899.90
650.00
700.00
5,719.99

Accrued payroll
Cash

5,719.99
5,719.99

Work in process (12,850 1,680)

Factory overhead control (1,680 + 625)
Payroll
MULTILE CHOICE
1.
b
2.
b
3.
a
4.
b.
5.
a
`

6.
7.
8.
9.
10.

a
d
d
a
c

11,170.00
2,305.00
13,475

11.
12.
13.
14.
15.

b
c`
d
d
d