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I was looking at the answer for this case and was wondering if you could explain what it means by the answer for which the
I was looking at the answer for this case and was wondering if you could explain what it means by the answer for which the actual accounts should be charged. The answer says "hence it would be appropriate to charge the bonuses and the weekday overtime to factory overhead and the overtime for sunday and saturday must be attriubted towards rush order jobs". Could i get a more detailed reason behind this.
1. How might Rlley concerns 2 Does the compensation have to be all hourly rate or all inc usinesses? MINI-CASE 2 Allocating overtime premium and bonus costs Huron Manufacturing Co. uses a job order cost system to cost its prod recently signed a new contract with the union that calls for time. for all work over 40 hours a week and double-time for Saturday and Also, a bonus of 1% of the employees' earnings for the the employees at the end of the fiscal year. The controller, the pl ager, and the sales manager disagree as to how the overtime pay and the ay paid to ant man- bonus should be allocated. An examination of the first month's payroll under the new union con- ca tract provisions shows the following: king Direct labor Regular-40,200 hours @ $10 . . $402,000 Overtime: $25,500 8,000 Sundays-300 hours Indirect labor $20.. 6,00039,500 14,800 $456,300 Analysis of the supporting payroll documents revealed the following: a. More production was scheduled each day than could be handled in regular workday, resulting in the need for overtime. h enecial b. The Saturday and Sunday hours resulted from rush orders wi contract arrangements with the customers. The controller believes that the overtime premiums and the bonus Sun charged to factory overhead and spread over all production of the ing period, regardless of when the jobs were completed. should beStep by Step Solution
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