[ACYCST1] Accounting for Labor

Hourly-rate Plan

definite rate per hour per employee

Piece-rate Plan

definite rate per output per employee

Modified Wage Plan

combination of hourly-rate and piece-rate plans

Daily-rate Plan

definite rate per day per employee

Time-keeping Department

accounts for the time spent by the employees

Payroll Department

computes each employee’s earnings

Regular time

charged to job debiting Work in Process

Overtime

may be charged to jobs, to factory overhead, or allocated partly to jobs and partly to overhead

Overtime premium

represent amount paid in excess of regular rate, to employees in excess of 8 hours in a day, or working during holidays or their rest day

Collective Bargaining Agreement

indicates overtime premium rate

Waiting or idle time

cost of non-productive hours of direct labor caused by lack of work, waiting for materials delay from scheduling machine breakdown and machine set-up

Make-up pay

benefits new employees because it guarantees them a minimum salary while they are learning their new job

Shift premium

extra pay to work during less desirable evening shift or night shift

Employers’ contribution

the amount remitted to different government agencies

Employee’s income tax

the amount of tax to be withheld each period depends on the following

1. Employee name

2. Rate per hour

3. Number of hours work

4. Classification

Data from time tickets

Labor records

used to trace the costs of direct manufacturing labor to individual jobs and to accumulate the costs of indirect manufacturing labor in the manufacturing overhead record

Employee’s supervisor

approves time tickets