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