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

Direct materials
Direct labor
Factory overhead
Overtime
Total

CHARGED
JOB 401
28,000
18,000
5,600
______
51,600

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.
Regular
OT
Employee Hrs Rate
Pay
Hours
Austria
42
36.00
1,512
2
Bautista
43
36.00
1,548
3
DeSantos 44
45.00
1,980
4
Motus
40
30.00
1,200
Reyes
40
30.00
1,200
TOTAL
7,440
b)
1.
Payroll
Accrued payroll
2.

3.

Rate
18.00
18.00
22.50
-

Overtime
Premium
36.00
54.00
90.00
-__
180.00

Total
Pay
1,548
1,602
2,070
-___
7,620
7,620
7,620

Accrued payroll
Cash

7,620

Work in process (1,512 + 1,548 + 1,980)

FOC (1,200 + 1,200 + 180 )
Payroll

5,040
2,580

7,620

7,620

Page 2
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

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

11,632.50
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.
Assume the following amount as previous wages (for the past 3 weeks)
Castro
5,600
Ardina
7,500
Brioes
6,500
David
6,200
Fajardo
5,900
Tomas
5,800
Villas
5,200

Employee
Castro
Ardina
Briones
David
Fajardo
Tomas
Villas
TOTAL

REGU
HRS.
42
45
48
48
45
42
40

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
-

PAY
40.00
125.00
160.00
160.00
100.00
40.00
-__
625.00

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

Continuation
Employee
Total
SSS
Pay
Prem.
Castro
1,720.00 250.00
Ardina
2,375.00 333.30
Briones
2,080.00 283.30
David
2,080.00 283.30
Fajardo
1,900.00 266.70
Tomas
1,720.00 250.00
Villas
1,600.00 233.30
TOTAL
13,475.00 1899.90

W/holding Phil.
Tax
Health
681.28
87.50
614.53
112.50
840.93
100.00
865.33
100.00
603.38
87.50
461.38
87.50
438.28
75.00
4,505.11
650.00

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
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

Pagibig
100.00
100.00
100.00
100.00
100.00
100.00
100.00
700.00

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

Page 4
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

Entry for No 11 should be

Work in process Job 1010
Work in process Job 1011
Factory overhead control (1,250 + 37)
Payroll payable

11,170.00
2,305.00
13,475

11. none of the give

12.
d
13.
d
14.
d
15.
c

9,748
1,200
1,287
12,235