Description

Peggy Nolan earns $20 per hour for up to 300 units of production per
day. If she produces more than 300 units per day, she will receive an
additional piece rate of $.5333 per unit. Assume that her hours worked
and pieces finished for the week just ended were as follows: a.
Determine Nolan’s earnings for each day and for the week. (Round
piece-rate computations to the nearest whole dollar.) b. Prepare the
journal entry to distribute the payroll, assuming that any make-up
guarantees are charged to Factory Overhead.
Solution
Part a
Worke Pric Earnings for the day FOH
d hours e calculations
Days
Mondays 8 300 $ 20*8 hrs = 16
0
Tuesday 8 260 $ 20*8 hrs = 16 160/300*40 2
0 = 1
Wednesda 8 420 ($ 20*8 hrs.) 22
y +(0.5333*(420- 4
300))=
Thursday 8 440 ($ 20*8 hrs.) 23
+(0.5333*(440- 5
300))=
Friday 8 280 $ 20*8 hrs = 16 160/300*20 1
0 = 1
Total wages 93 3
9 2

Minimum wages guaranteed per day = $ 20*8 hrs

= $ 160 up to 300 units

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 So, wages pertaining to the shortfall are charged to FOH
Journal entry Debit Credit
Direct Wages(939-32) 907
Factory Overheads 32
Cash/wages payable 939

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https://www.coursehero.com/file/94162725/cap-1015docx/
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