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Unformatted text preview: CHAPTER 3 SOLUTIONS Part I Part II 1. F 6. T 11. T 1. d 8. c 15. r 2. F 7. T 12. T 2. i 9. q 16. o 3. T 8. F 13. F 3. h 10. s 17. j 4. T 9. T 14. T 4. p 11. b 18. n 5. T 10. T 15. T 5. m 12. e 19. k 6. t 13. g 20. l 7. a 14. f Part III 1. (c) A modified wage plan directs management’s attention to the employees who were unable to meet quotas because it is likely those employees would be paid the make-up guarantee more often than other, more productive employees. 2. (a) The labor time record is needed to provide evidence of the employee’s presence in the plant from the time of entry to departure, and shows the employee’s time spent on each job. 3. (d) Fringe costs form a substantial element of labor cost to the employer and include such items as the employer portion of the FICA tax, holiday pay, overtime premium pay, and pension costs. 4. (c) A piece-rate plan is an incentive wage plan that bases earnings on the employee’s quantity of production. 5. (b) Theoretically, the employer’s share of the payroll taxes should be charged to the same accounts as the direct and indirect labor. However, due to the additional expense and time required for such allocation, all factory payroll taxes are usually charged to Factory Overhead. 6. (d) In determining whether the overtime premium should be charged to a specific job or spread over all jobs via the factory overhead rate, the key consideration is whether...
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- Spring '11