Question
roll calculation and distribution; overtime and idle time A rush order was accepted by San Diego Machine Conversions for five van conversions. The labor time
roll calculation and distribution; overtime and idle time
A rush order was accepted by San Diego Machine Conversions
for five van conversions. The labor time records for the week
ended January 27 show the following:
Labor Time
RecordsHour Distribution
Employees Hours
Van
#1
Van
#2
Van
#3
Van
#4
Van
#5
Peavy (Supervisor) 42
Bell . . . . . . . . . . . . . . . . 45 10 10 10 10 5
Gonzalez . . . . . . . . . . . 48 24 24
Hairston . . . . . . . . . . . 48 24 24
Headley . . . . . . . . . . . . 45 15 15 15
Rodriguez . . . . . . . . . . 42 24 8
Young . . . . . . . . . . . . . 40 20 10
All employees are paid $10.00 per hour, except Peavy, who
receives $20 per hour. All overtime premium pay, except Pea-
vy's, is chargeable to the job, and all employees, including
Peavy, receive time-and-a-half for overtime hours.
Required:
1. Calculate the total payroll and total net earnings for the week.
Assume that an 18% deduction for federal income tax is
required in addition to FICA deductions. Assume that none of
the employees has achieved the maximums for FICA and
unemployment taxes. Hours not worked on vans are idle time
and are not charged to the job.
2. Prepare the journal entries to record and pay the payroll.
3. Prepare the journal entry to distribute the payroll to the
appropriate accounts.
4. Determine the dollar amount of labor that is chargeable to
each van, assuming that the overtime costs are proportionate
to the regular hours used on the vans. (First compute an
average labor rate for each worker, including overtime pre-
mium, and then use that rate to charge all workers, hours
to vans.)
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