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Accounting For Labor

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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Krizel Dixie Parra
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8K views

Accounting For Labor

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.

Uploaded by

Krizel Dixie Parra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 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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