Exam 3: Accounting for Labor

The following payroll summary is prepared for the Sothern Manufacturing Company for the week ending March 29: Payroll taxes and insurance are to be computed as follows: Prepare the general journal entries to: a.Record the payroll. b.Pay the payroll. c.Distribute the payroll to the appropriate accounts. d.Record the employer's share of payroll tax expense. (All of the employees work in the factory.)

John Elton, who is classified as direct labor, earns $1,000 per week and is entitled to four weeks of vacation and 10 holidays each year. How much should be accrued for his vacation each week?

Management of the Von Machine Company requests that you calculate the effect of two different wage payment plans upon employee earnings and also on the unit labor cost of Product A. The following information is available: (1) The hourly rate is $9.00. (2) The labor rate per piece of Part X, if the employee is paid on a piece-rate basis, is $.30. Ten pieces of Part X are required for one unit of Product A. The plant works a 6-day week and an 8-hour day, totaling 48 hours per week. No overtime premium pay is to be considered in your analysis. During a selected week, the following pieces of Part X were produced: An agreement with the union requires a minimum rate of $6.50 per clock hour be paid to employees. a.Calculate the labor cost each day of the week for an employee under:(1)the hourly-rate plan.(2)the piece-rate plan. b.If the company could anticipate a steady production level of 250 units of Part X each day, which plan would you recommend to the company's management? Why?

Daktari Enterprises' Schedule of Earnings and Payroll Taxes for April is as follows: Assuming overtime was the result of random scheduling of jobs, the entry to distribute payroll would include:

An analysis of total labor costs into work in process and factory overhead components is recorded on a(n):

Becky Graham earns $15 per hour for up to 300 units of production per eight-hour day. If she produces more than 300 pieces per day, she will receive an additional piece rate of $.40 per unit. A summary of her work week follows: (a) Determine Graham's earnings for each day and for the week. (b) Prepare the journal entry to distribute the payroll for the week.

Ken Astor is a factory worker at Flox Co. earning $27.00 per hour. Astor is eligible for five paid holidays and six weeks vacation and is paid "time-and-a-half" for overtime. Astor's earnings so far this year are $45,000. Tax rates are as follows: Employee income tax 15% on all earnings FICA 8% on first $100,000 of earnings FUTA 1% on first $8,000 of earnings SUTA 4% on first $8,000 of earnings Assuming Ken worked 46 hours this week, calculate the total expense to Flox Co for this weeks, wages, payroll taxes and fringe benefits.

David Andrews works at the Neal Company where he makes $12 per hour with "time-and-a-half" for overtime. For the week ended January 8, David worked 45 hours as follows: Job 417 34 hours Job 532 11 hours Assuming the overtime was due to priority scheduling for Job 532, how much will be charged to Job 532?

Features of a 401(k) plan include all of the following except:

Tacy Company's Schedule of Earnings and Payroll taxes for the period ended March 28 - 31 to be paid April 5 follow: Prepare the journal entries to: (a) Accrue the payroll in the appropriate period (b) Distribute the accrued payroll in the appropriate period (c) Recognize related accrued employer's payroll taxes in the appropriate period assuming payroll taxes are spread over all jobs produced.