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  • Accounting For Labor

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    Krizel Dixie Parra
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    The document describes a problem involving the costs incurred for two jobs completed by Evergreen Company in May. It provides the direct materials, direct labor regular, and overtime premium costs for each job. It also describes two alternative methods for recording the overtime premium - charging it to each job or allocating it to factory overhead. Under each method, it shows the computation of total costs for each job.

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    ACCOUNTING FOR LABOR

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    The document describes a problem involving the costs incurred for two jobs completed by Evergreen Company in May. It provides the direct materials, direct labor regular, and overtime premium costs for each job. It also describes two alternative methods for recording the overtime premium - charging it to each job or allocating it to factory overhead. Under each method, it shows the computation of total costs for each job.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    6K views7 pages

    Accounting For Labor

    Uploaded by

    Krizel Dixie Parra
    The document describes a problem involving the costs incurred for two jobs completed by Evergreen Company in May. It provides the direct materials, direct labor regular, and overtime premium costs for each job. It also describes two alternative methods for recording the overtime premium - charging it to each job or allocating it to factory overhead. Under each method, it shows the computation of total costs for each job.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 7

    PROBLEM 1

    The Evergreen Company produces tools on a job order basis. During May, two jobs
    were completed, and the following cost were incurred:

    Job 401 Job 402


    Direct materials 28,000.00 37,000.00
    Direct labor - Regular 18,000.00 23,000.00
    Overtime Premium 6,000.00

    Other factory cots for the month totaled P 16,800.00. Factory overhead costs are
    allocated one-third to Job 401 and two-thirds to Job 402.
    Required:
    a.) Describe two alternative methods of recording the overtime premium and explain
    how the appropriate method affect the cost of each Job.

    b.) Compute the cost of Job 401 and 402 under each of the two methods.

    Solution:
    A.) 1. CHARGE TO THE JOB
    2. CHARGED TO THE FACTPRY OVERHEAD CONTROL

    CHARGED TO JOB
    JOB 401 JOB 402
    Direct materials 28,000.00 37,000.00
    Direct labor - Regular 18,000.00 23,000.00
    Factory overhead 5,600.00 11,200.00
    Overtime Premium 6,000.00
    Total 51,600.00 77,200.00

    CHARGED TO FOH
    other factor cost 16,800.00 given sa problem
    Overtime 6,000.00 given Job402
    Total 22,800.00

    DETAILED COMPUTATTION

    Job 401 Job 402


    22,800.00 22,800.00
    1/3 2/3
    7,600.00 15,200.00

    Job 401 Job 402


    16,800.00 16,800.00
    1/3 2/3
    5,600.00 11,200.00
    er basis. During May, two jobs

    Factory overhead costs are

    overtime premium and explain

    of the two methods.

    CHARGED TO FOOD
    JOB 401 JOB 402
    28,000.00 37,000.00
    18,000.00 23,000.00
    7,600.00 15,200.00

    53,600.00 75,200.00

    for Job 401 1/3


    GIVEN SA PROBLEM
    for Job 402 2/3
    A weekly payroll summary made from time tickets shows the following data:

    EXEMPTION NUMBER OF HOURS


    CLASSIFICATIO RATE/HOU
    EMPLOYEE STATUS REGULAR OVERTIME
    N R
    Austria, B. S Direct 36 40 2
    Bautista, D. ME Direct 36 40 3
    De Santos, M. ME - 2 Direct 45 40 4
    Motus, R. HF - 4 Indirect 30 40
    Reyes, A. HF Indirect 30 40

    Overtime is payable at one-and-a-half times the regular rate pay for an employee.
    PROBLEM 1
    The Norman Company recently adopted an incentive plan. factory workers are paid
    P7.50 per unit with a guranteed minimum eage of P2,000 per week. Following is a
    report on employees' productivity for the week ending May 19, 2019. All employees
    worked the full 40-hour week.

    WEEKLY SUMMARY
    EMPLOYEE'S NAME UNIT PRODUCED
    R. Cruz 240
    J. Briones 286
    C. David 275
    A. Mendoze 240
    F. Rivera 225
    R. Tolentino 285
    plan. factory workers are paid
    000 per week. Following is a
    May 19, 2019. All employees

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