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 86 36.00 3,096 6 18.00 108.00 3,204
Bautista 88 36.00 3,168 8 18.00 144.00 3,312
DeSantos 88 45.00 3,960 8 22.50 180.00 4,140
Motus 80 30.00 2,400 - - - 2,400
Reyes 80 30.00 2,400 - - -__ 2,400___
TOTAL 15,024 432.00 15,456

Total Total Net

Employee Pay WTax SSS Pagibi PH Deductio Pay
g ns
Austria 3,204 91.23 109.00 96.12 100 396.35 2,807.65
Bautista 3,312 102.03 127.20 99.36 100 428.59 2,883.41
DeSantos 4,140 - 145.30 100.00 100 345.30 3,794.70
Motus 2,400 - 90.80 72.00 100 262.80 2,137.20
Reyes 2,400 15.85 90.80 72.00 100 278.65__ 2,121.35
TOTAL 15,456 209.11 563.10 439.48 500 1,711.69 13,744.31
Withholding tax
Austria 3,204
2,500 - 20.83
704 x 10% 70.40
91.23

Bautista 3.312
2,500 20.83
812 x 10% 81.20
102.03

Reyes 2,400
2,083
b) 317 x 5% 15.85
1. Payroll 15,456
WTax Payable 209.11
SSS Prem. Payable 563.10
Pag-ibig Contributions Payable 439.48
Philhealth Contributions Payable 500.00
Accrued payroll 13,744.31

2. Accrued payroll 13,744.31

Cash 13,744.31

3. Work in process (3,096+3,168+3,960) 10,224

FOC (2,400+2,400+432 ) 5,232
Payroll 15,456

Problem 3 - Norman Company

Employe Guaranteed Total pay – piece rate Deficiency Total

e 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.

REG LAR PAY OT OT PAY TOTAL

Employee HRS. RATE HRS. RATE PAY
Castro 80 150.00 12,000.00 12,000.00
Ardina 85 160.00 13,600.00 5 80.00 400.00 14,000.00
Briones 88 150.00 13,200.00 8 75.00 600.00 13,800.00
David 88 150.00 13,200.00 8 75.00 600.00 13,800.00
Fajardo 85 150.00 12,750.00 5 75.00 375.00 13,125.00

- - -__
TOTAL 426 760.00 64,750.00 26 305.00 1,975.00 66,725.00

Continuation
Employee Total SSS W/holding Phil. Pag- Total Net Pay
Pay Prem. Tax Health ibig Deduct
Castro 28,800 581.30 7,378.89 350.00 100.00 8,410.19 3,589.81
Ardina 29,500 581.30 6,314.89 362.50 100.00 7,358.69 6,641.31
Briones 28,800 581.30 6,757.77 350.00 100.00 7,789.07 6,010.93
David 27,300 581.30 6,610.89 337.50 100.00 7,629.69 6,170.31
Fajardo 25,925 581.30 6,170.89 312.50 100.00 7,164.69 5,960.31

TOTAL 140,325 2,906.50 33,233.33 1,712.50 500.00 38,352.33 28,372.67

Castro
Total pay 28,800
22,017 - 5,208.33
6,783 x 32% 2,170.56
7,378.89
Ardina
Total pay 29,500
26,042 5.208.33
3,458 x 32% 1,106.56
6,314.89
Briones
Total pay 28,800
23,958 5,208.33
4,842 x 32% 1,549.44
6,757.77
David
Total pay 27,300
22,917 5,208.33
4,383 x 32% 1,402.56
6.610.89
Fajardo
Total pay 25.925
22,917 5,208.33
3,008 x 32% 962.56
6,170.89
2. Payroll 66,725
W/holding tax payable 33,233.33
SSS Premiums payable 2,906.50
Phil Health Contributions payable 1,712.50
Pag-ibig funds contributions payable 500.00
Accrued payroll 28,372.67

Accrued payroll 28,372.67

Cash 28,372.67

Work in process 52,750

Factory overhead control (12,000 + 1,975) 13,975
Payroll 66,725

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 15. d