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  • Cost Accounting: Controlling and Accounting For Labour Costs

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    Asma Ahmed
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    The document discusses payroll departments and their role in accounting for labor costs. Payroll departments are responsible for tasks like computing payroll, distributing payroll amounts to jobs and departments, managing payroll deductions, and issuing paychecks. They obtain time worked information from time tickets and clock cards to record hours worked and distribute labor costs. Cost departments then accumulate and classify the direct and indirect labor costs computed by payroll for use in production costing and financial reporting.

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    Cost Accounting

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    The document discusses payroll departments and their role in accounting for labor costs. Payroll departments are responsible for tasks like computing payroll, distributing payroll amounts to jobs and departments, managing payroll deductions, and issuing paychecks. They obtain time worked information from time tickets and clock cards to record hours worked and distribute labor costs. Cost departments then accumulate and classify the direct and indirect labor costs computed by payroll for use in production costing and financial reporting.

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    Download as PPT, PDF, TXT or read online from Scribd
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    16 views11 pages

    Cost Accounting: Controlling and Accounting For Labour Costs

    Uploaded by

    Asma Ahmed
    The document discusses payroll departments and their role in accounting for labor costs. Payroll departments are responsible for tasks like computing payroll, distributing payroll amounts to jobs and departments, managing payroll deductions, and issuing paychecks. They obtain time worked information from time tickets and clock cards to record hours worked and distribute labor costs. Cost departments then accumulate and classify the direct and indirect labor costs computed by payroll for use in production costing and financial reporting.

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    Attribution Non-Commercial (BY-NC)
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    of 11

    COST ACCOUNTING

    CONTROLLING AND ACCOUNTING FOR LABOUR COSTS

    PAYROLL DEPARTMENT
    WORKING Computation of payroll Distribution of payroll to jobs , processes and departments. PREPARATION Clock cards & time tickets Computer printouts

    PAYROLL DEPARTMENT
    TASKS Payroll deductions Maintaining earning records Preparation of paychecks Recording of job classification ,department & wage rate Worked hours & wages earned

    PAYROLL DEPARTMENT
    PAYROLL PAYMENTS Workers are paid weekly, semi -monthly or monthly. Cash payments Payroll checks

    PAYROLL DEPARTMENT
    PAYROLL DISTRIBUTION Time tickets are sorted to permit payroll distribution. Amount of labor cost must agree with payroll account. Distribution summary show labor hours.

    COST DEPARTMENT
    Records direct and indirect labor costs. WORKING In organizations where cost accounting activities are decentralized cost clerks Accumulate & classify labor costs. Compute production costs and services through time tickets.

    ORGANIZATION CHART FOR LABOUR COST CONTROL


    PERSONEL
    DEPT MEDICAL DEPT Production planning

    TIME & MOTION Producing Dept

    Time Keeping

    Payroll

    Cost Dept

    COMPUTERIZED PAYROLL

    Eliminated the need for manual processing. Begin the day employee is hired and employees master file is maintained.

    INCENTIVE WAGE PLANS

    Incentive wage plans reward workers in direct proportion to their increased output. Standards enable workers to receive benefits from incentives. Union attitudes vary towards wage plans.

    REQUIREMENTS OF INCENTIVE WAGE PLANS

    Applicability to increased out put situations. Provisions for proportionality. Setting of fair standards Immediate reward every day.

    PURPOSE OF INCENTIVE WAGE PLANS

    Induce workers to produce more & earn a higher wage Reduce unit costs for FOH and labor cost combined.

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