Intermediate: Labour costing and preparation of relevant labour accounts Shown below is one week's basic payroll data for the assembly department of Wooden Ltd, a manufacturer of a range of domestic furniture.

Overtime, which is paid at basic time rate plus one-half, is used as a means of generally increasing the factory output. However, 20%
of the overtime shown above, for both direct and indirect workers, was incurred at the specific request of a special customer who requires, and is paying for, a particular batch of coffee tables to be completed qUickly.
Analysis of the direct workers' lime from retumed work tickets shows:

Required:

(a) Assuming the company operates a historical batch costing system, fully integrated with the financial accounts, write up the assembly department's wages, work in progress and production overhead control accounts, and other relevant accounts. {14 marks)

(b) Explain the reasons for, and effect on product costs of, your treatment of the following items:
(i) employer's National Insurance contributions, (ii) group bonus, (iii) overtime earnings.

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Direct Indirect workers workers Total attendance time (hours) 800 350 Basic hourly rate of pay () 1.50 1.00 Overtime hours worked (hours) 100 40 Shift premium () 150 50 Group bonus () 160 70 Employees' deductions (): Income Tax 250 100 National Insurance 75 35 Employer's contributions (): National Insurance 125 55