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sol Assign. 6 & 7 - E3-1 a $810 Regular 57 hours...

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E3-1 a. $810 Regular: Work in Process $697.50 57 hours × $15.00 (regular rate) = $ 855.00 Factory Overhead (Maintenance and Repair) $157.50 Overtime premium: 13 hours × $ 7.50 (half of regular rate) = $97.50 Factory Overhead 4 hours × $15 (equal to regular rate) = $60.00 157.50 (Overtime Premium) $ 1,012.50 b. Work in Process ........................................................ 697.50 Factory Overhead (Overtime Premium) .................... 157.50 Factory Overhead (Maintenance and Repair) ........... 157.50 Payroll ................................................................. 1,012.50 Note: The single journal entry for one employee is required here only for the purpose of illustrating the principle in- volved. Normally the entry would be for the total factory payroll for the period. Calculation for distribution of labor costs (not required in student’s solution): Hours × R at e = Total Account Debited Factory Overhead Expense Double- Time - and- Double- Gross Work in Overtim e Regular Time Regular a- Half Time Earnings Process Premiu m M & R Sunday (indirect) Monday (direct) 8 4 $15.00 $30.00 $ 120.00 120.00 $120.00 $ 60.00 $ 60.00 Tuesday (direct) 8 15.00 120.00 120.00 Wednesday (direct) 8 15.00 120.00 120.00 Thursday (direct) 8 15.00 $22 .50 198.75 172.50 26.25
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2 Chapter 3 Friday (direct) 8 15.00 22. 50 187.50 165.00 22.50 Saturday (indirect) 22. 50 146.25 48.75 97.50 40 4 $1,012.50 $ 697.50 $ 157.50 $ 157.50
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Chapter 3 3 EXERCISES E3-2 a. Payroll 1,012.50 FICA Tax Payable (8.0% of $1,012.50) 81.00 Employees Income Tax Payable (10.0% of $1,012.50) 101.25 Wages Payable 830.25 b. Wages Payable 830.25 Cash 830.25 E3-3 a. Hours Pieces Earnings @ Earnings @ Make-Up Payroll Day Worked Finished $20/hr. $.40/piece Guarantee Earnings Monday 8 400 $160 $160 $160 Tuesday 8 380 160 152 $8 160 Wednesd ay 8 440 160 176 176 Thursday 8 450 160 180 180 Friday 8 360 160 144 16 160 Total 40 $800 $812 $24 $836 b. Work in Process .............................. 812 Factory Overhead ............................ 24 Payroll ........................................ 836
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Chapter 3 4 E3-4 a. The overtime premium could be charged to Job 402 or charged to Factory Overhead and allocated between Jobs 401 and 402. If the contract provisions for Job 402 indicate the necessity for overtime in order to complete the job in accordance with the customer’s specifications, or if the overtime is due to an emergency demand by the customer, the overtime premium should be charged directly to Job 402. If the overtime is not directly attributable to contract provisions or other factors identified with Job 402, the overtime premium should be charged to Factory Overhead. b. Costs of Jobs 401 and 402: Overtime Premium Overtime Premium Charged to Charged to Job 402 Factory Overhead Job 401 Job 402 Job 401 Job 402 Direct materials .................................. $28,000 $ 37,000 $28,000 ............................................................ $37,000 Direct labor ......................................... 18,000 29,000* 18,000 ............................................................ 23,000 Factory overhead ............................... 5,600 11,200 7,600 ............................................................ 15,200 ............................................................ Total cost $ 51,600 $ 77,200 $ ............................................................ 53,600 $ 75,200 * Includes overtime premium of $6,000. E3-5 a. June 7 June 14 June 21 June 28 FICA tax ................................. $ 2,920 $ 2,736 $ 2,984 $ ...... 3,072 Total deductions ..................... 9,560 9,236 9,759 ...... 9,952 Net earnings ........................... 26,940 24,964 27,541 ...... 28,448 b. 1. June 7 Payroll 36,500 FICA Tax Payable 2,920 Employees Income Tax Payable 4,215
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Chapter 3 5 Health Insurance Payable 600 Employees Annuity Payable 1,825 Wages Payable 26,940 14Payroll 34,200 FICA Tax Payable 2,736 Employees Income Tax Payable 4,120 Health insurance Payable 600 Employees Annuity Payable 1,780 Wages Payable 24,964
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Chapter 3 6 E3-5 Concluded 21Payroll 37,300 FICA Tax Payable 2,984 Employees Income Tax Payable 4,320 Health Insurance Payable 600 Employees Annuity Payable 1,855 Wages Payable 27,541 28Payroll 38,400 FICA Tax Payable 3,072 Employees Income Tax Payable 4,410 Health Insurance Payable 600 Employees Annuity Payable 1,870 Wages Payable 28,448 2. June 7 Wages Payable 26,940 Cash 26,940 14Wages Payable 24,964 Cash 24,964 21Wages Payable 27,541 Cash 27,541
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