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Problem 1 – Overtime
Assuming an employee regularly earns P65.00 per hour for an 8-hour a day. If called upon to work more than 8 hours
in a working day, the company will have to pay overtime premium for hours worked in excess of 8 hours.
Required:
1. Assuming the employee works 12 hours on Monday, and is paid 50% overtime premium (time and a half), the
earnings to be charged for direct labor and overhead, respectively, would be?
2. Assuming the employee is paid a premium of 100% (double time), the earning to be charged to direct labor and
overhead would be?
Required:
Allocate Jolly’s earnings for the week between direct labor and manufacturing overhead.
Employees
Working Days JL MA
Monday 8 8
Tuesday 8 8
Wednesday 7 8
Thursday 9 8
Friday 8 9
Saturday - 4
Hourly rate P64 P75
Weekly Summary
Employee’s name Unit produced
1. N. Chua 240
2. M. Ben 286
3. A. Tan 275
4. A. Par 240
5. A. Cruz 225
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Required:
1. Compute each employee’s gross pay.
2. What amount should be charged to work-in process?
3. What amount should be charged to Factory overhead?
Overtime is payable at 50% (time and half) of the regular rate pay for an employee.
Required:
1. Determine the gross pay for each employee
2. Prepare the journal entries for
a. Recording the payroll
b. Allocation of the payroll
c. Payment of the payroll
The factory payroll is 70% direct laborer while 30% are indirect. The following schedule provides the information
necessary to record the employer’s mandatory contribution for the period.
Required:
Provide the journal entries for the following:
1. Record the payroll
2. Payment of the net earnings to employees
3. Allocation of the payroll
4. Employer’s mandatory contribution
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Problem 7-Payroll Computation
JOE Co. had the following employees and the payroll data made from time ticket for the month ended August 31
pertaining to Job 100.
Number
Employee’s
Position of hours
Name
worked
IA Plant supervisor 168
GM Factory worker 180
CE Factory worker 192
All employees are paid P140 per hour, except IA, who receives P150 per hour. All overtime premium pay is
chargeable to the factory overhead control. All employees including IA received time and a half (50%) for overtime
hours.
Note: The Company based the computation of SSS, Philhealth and HDMF from the 40 hours per week or actual hours work whichever is lower.
Required:
1. Calculate the total payroll and total net earnings for the month.
2. Compute the employer’s SSS, Philhealth and HDMF contribution
Required:
Journal entry to record and distribute the labor cost of the production for the month.
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