Intermediate: Calculation as analysis of gross wages and preparation of wages and overhead control accounts The finishing department in a factory has the following payroll data for the month just ended:

Overtime, which is paid at 140% of basic rate, is usually worked in order to meet the factory’s general requirements. However, 40% of the over¬ time hours of both direct and indirect workers in the month were worked to meet the urgent request of a particular customer.

Required:

(a) Calculate the gross wages paid to direct work¬ ers and to indirect workers in the month.
(4 marks)

(b) Using the above information, record the rel¬ evant entries for the month in the finishing department’s wages control account and production overhead control account. (You should clearly indicate the account in which , the corresponding entry would be made in the company’s separate cost accounting system. Workings must be shown.)

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Direct Indirect workers workers Total attendance time (including overtime) Productive time Non-productive time: 2640 hours 940 hours 2515 hours Machine breakdown 85 hours Waiting for work 40 hours Overtime 180 hours 75 hours Basic hourly rate 5.00 4.00 Group bonuses 2840 710 Employers' National 1460 405 Insurance contributions