Mendoza Company compensation scheme for it factory workers provides a combined minimum guaranteed wage and a

piece rate. Each worker is paid 30 piece with a minimum guaranteed wage of 3600 per week.
Team No of workers Unit produce per worker per week
A 50 110
B 55 140
c 60 105

1. Total amount of payroll

2. Factory overhead

On a satursay morning, a customer brings rush order of 10000 units of product X. Rualo Company agrees to produce
these units for the customer on Sunday. 90 of the direct laborer who earn 100 per hour worker 8 hours on Sunday to
complete the order. The regular working days are Monday to Saturday. The company pays 40% OT premium on Sundays
Material costings 8 per unit. The factory overhead is applied at 2/3 of direct labor.
1. Direct labor
2. IF GP rate is 40% based on cost, unit sales price is
3. If not rush order, total billing price is

The following report pertains to the no of hours worked by three of the factory workers of corp. they work 8 hours a
day and labor rate per hour is 100
Shift jk rm jin
6am-2pm 8 8
2pm-10pm 8 6 8
Beyond 10 pm 4 4
total 20 14 12

JK and RM are receiving 20% shift premium during the morning shift. Overtime pay is time and a half
1. Direct labor
2. Factory overhead
N

Problem 1. DICK O. QUILALA and DINA L. AMAN are workers of DIPAALAM Company who are involve in forming the
parts needed in one of its products. DICK O. QUILALA and DINA L. AMAN received P75 and P80 per hour respectively
during regular hours. DIPAALAM Company pays its employee, time and a half for all the overtime works in excess of the
48 hours per week.
Required: Compute for the Wages allocated to (a) Direct Labor, and Wages allocated to (b) Factory overhead assuming:
1) In a given week, DICK O. QUILALA and DINA L. AMAN works for 50 hours and 53 hours respectively, and that
DICK O. QUILALA is idle for 3 hours.
2) In another week, DICK O. QUILALA and DINA L. AMAN works 52 hours and 51 hours respectively, and that
DINA L. AMAN is idle for 2 hours. Overtime works are due to rush nature of Job.
Problem 2. Management of the Von Machine Company provided you the following information related to payment
scheme of the worker of Product A:
 The hourly rate is P90.00 which calls for standard production per hour of 30 units
 Any production in excess of 240 units in an 8-hr work is paid at P2.5 per unit
 Ten pieces of Part X are required for one unit of Product A. The plant works a 6-day week and an 8-hour day,
totaling 48 hours per week. No overtime premium pay is to be considered in your analysis.
During a selected week, the following pieces of Part X were produced:
Day 1 2 3 4 5 6
Part X Produced 150 200 240 180 300 200
Required:
a) In the given week compute for (1) the total earnings of the employee, and (2) the unit labor cost of Product A.
b) Using the information in Problem 2, except that the employee is paid at P3.00 per unit with a minimum hourly rate
of P65.00. Compute for (1) the total earnings of the employee and (2) the unit labor cost of Product A.

Problem 3: Walo Widget Inc. is in the process of completing labor negotiations for the coming year. Part of these
negotiations call for an increase in the base wage rate for direct labor from P10 to P12 per hour, with a corresponding
increase in fringe benefits. At present, fringe benefits amount to 35% of total wages, and this percentage will remain
unchanged with the new contract. The present labor standards call for 8 direct labor hours per unit of output. Other
conversion costs amount to P40 per unit, of which 75% is for variable costs. Materials costs amount to P8 per unit.
Administrative costs are fixed and amount to P10 per unit at the present production level. Products are sold with a
gross margin of 30% on sales.
Required:
(1) Compute the current selling price of a unit of output.
(2) Compute the new selling price to be charged if there is no increase in productivity as a result of the new labor
contract.
(3) Compute the selling price to be charged if the new labor contract were accompanied by a 20% increase in
productivity.