Accounting for payroll The Bean Blossom String Factory manufactures musical instru- ments, and uses a job order costing system to measure product costs. Employees prepare time tickets identifying the jobs they worked on during the day. Any time not identified with a specific job is classified as indirect labor and charged to manufacturing overhead. A payroll distribution report is prepared weekly and is the basis for making the payroll journal entries and assigning payroll costs to production. Below is the labor distribution report for the last week in April.

In addition to gross wages the company must pay FICA taxes of 7 percent, state unemploy- ment taxes of 2 percent, and federal unemployment taxes of .7 percent. Assume that 15 percent of gross wages are withheld from employees checks for federal income taxes, 7 percent for FICA taxes, 5 percent is withheld for state income taxes, and 3 percent is withheld for union dues.

Transcribed Image Text:

BEAN BLOSSOM STRING FACTORY Labor Distribution Report April 30 Job Number Hourly Total Wage Total Name 453 456 457 458 459 460 MOH Hours Rate Cost J. Skorinski 12 P. Lucas 17 12 S. Petersen 15 J. Yamamoto 8 8254 17 3 40 $7.00 $ 280 M. McKittrick F. Johnson 13 69360 23 10 10 0452 2 54 5 40 7.00 280 4 40 8.00 320 39 8.00 312 22 22 12 B. Dodd 23 23 9 L. Stone R. Grubbs G. DeSloover Totals 28 2 62 58 22 22 76 1208 14 7 28 21 16 75853 40 7.50 300 40 6.50 260 8 40 9.00 360 5 40 7.50 300 3 38 8.00 304 40 9.00 360 84 38 42 37 397 $3,076