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 Total pay – piece rate Deficiency Total

Wage 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.

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 SSS W/holding Phil. Pag- Total Net
Pay Prem. Tax Health ibig Deduct 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

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. b
2. b 7. d 12. c`
3. a 8. d 13. 692,500
4. b. 9. a 14. d
5. a 10. c