Task10-2 Accounting for Labor

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1、Task10-2AccountingforLaborRecordinglaborcostLaborturnoverAccountingforlaborcosts1.Recordinglaborcost•Labourattendancetimeisrecordedonanattendancerecordorclockcard.•Jobtimemayberecordedondailytimesheets,weeklytimesheetsorjobcards.•Thelabourcostofpieceworkersisrecordedonapieceworkticket/operati

2、oncard.1.1IdletimeIdletimeoccurswhenemployeescannotgetonwiththeirwork,throughnofaultoftheirown.Idletimehasacostbecauseemployeeswillstillbepaidtheirbasicwageorsalaryfortheseunproductivehoursandsothereshouldbearecordofidletime.IdlehoursIdletimeratio=×100%Totalhours2.LaborturnoverLabourturnoveri

3、stherateatwhichemployeesleaveacompanyandthisrateshouldbekeptaslowaspossible.Thecostoflabourturnovercanbedividedintopreventativeandreplacementcosts.ExampleRevolvingDoorsInchadastaffof2,000atthebeginningof20X1and,owingtoaseriesofredundanciescausedbytherecession,1,000attheendoftheyear.Voluntaryr

4、edundancywastakenby1,500staffattheendofJune,500morethanthecompanyhadanticipated,andtheseexcessredundancieswereimmediatelyreplacedbynewjoiners.Thelabourturnoverrateiscalculatedasfollows.500Rate=×100%=33%(2000+1000)/23.Accountingforlaborcosts(a)Thewagescontrolaccountactsasasortof'collectingplac

5、e'fornetwagespaidanddeductionsmadefromgrosspay.(b)Thefirststepistodeterminewhichwagecostsaredirectandwhichareindirect.Thedirectwageswillbedebitedtotheworkinprogressaccountandtheindirectwageswillbedebitedtotheproductionoverheadaccount.3.Accountingforlaborcosts3.AccountingforlaborcostsThefollow

6、ingdetailswereextractedfromaweeklypayrollfor750employeesatafactory.directlaborcost=36000+8700=447003.Accountingforlaborcosts(c)Thenetwagespaidaredebitedtothecontrolaccount,andthebalancethenrepresentsthedeductionswhichhavebeenmadefortax,socialinsurance,andsoon.Dr:WagescontrolaccountCr:Bank3.Ac

7、countingforlaborcostsExampleThewagescontrolaccountforACoforFebruaryisshownbelow.WhichofthefollowingstatementsaboutwagesforFebruaryisnotcorrect?AWagespaidduringFebruaryamountedto$128,400BWagesforFebruarywereprepaidby$12,000BCDirectwagescostinc