Accounting for labour costs, Cost Accounting

Accounting for Labour costs

We will contain an overview of accounting for labour costs as:

a) Gross Earnings

It is illustrated as item A that appears like a credit in the wages account and like a debit in the wages analysis control. The gross earnings are analyzed to illustrate the several deductions leaving net pay and indirect and direct wages also are charged to a range of account codes

b) PAYE tax

It is illustrated as item C that is credited to a PAYE tax account before being paid to the US revenue Authority via the employer. Item X illustrates the payments from the bank account or credit and the clearing of the PAYE tax account or Debit

c) National Hospital  Insurance Fund or NHIF Deductions

The national insurance deduction of employee is credited to a national insurance account as Item D. In addition the employer creates a national insurance contribution for all employees. It is illustrated as item F that is debited to an expense account and credited to the national insurance account. Net insurance or D+F is paid to the national Inland Revenue. After that item Y illustrates the entries, which clear the national insurance accounts or Debit and record bank payment or Credit. The national insurance of employee is a business overhead expense.

d) Other deductions

It involves such items like pension contributions and trade union subscriptions. The initial deductions from employees are credited in deductions account or Item E before payment is created to the suitable fund.

e) Net pay

This is illustrated as item B that is the balancing figure in the wages account or debit and while payment is made, this is illustrates in the bank account or credit

f) Direct Wages

Item T illustrates the credit to wages analysis control and the debit to job or product accounts. Individual accounts would be maintained for all job or product in addition to overall control account.

g) Indirect Wages

This is a simple analysis transaction that is debited to overhead departmental account or expense accounts.

Posted Date: 2/5/2013 6:38:12 AM | Location : United States







Related Discussions:- Accounting for labour costs, Assignment Help, Ask Question on Accounting for labour costs, Get Answer, Expert's Help, Accounting for labour costs Discussions

Write discussion on Accounting for labour costs
Your posts are moderated
Related Questions
Given the information that follows, prepare a cash budget for the XYZ Store for the first six months of 2010. All prices and costs remain constant. Sales are 90% for cre

Pauline's Pastry Shop decides to remodel its offices this year. As part of the remodeling, Pauline's trades furniture with a cost of $12,000 that had been expensed in the year of p

Martinez Corporation engaged in the following cash transactions during 2012. Sale of land and building $186,710 Purchase of treasury stock 42,130 Purchase of land 39,130

MARGINAL COSTING As per the Chartered Institute of Management Accountants, London, the phrase 'Marginal cost' means - 'the amount at every given volume of output through which

Waylander Coatings Company purchased waterproofing equipment on January 6, 2013, for $320,000.The equipment was expected to have a useful life of four years, or 20,000 operating ho

Most of David's clients are local. However, a few of his clients require out of town travel. He incurred $2,500 of airfare, $1,570 in lodging and $1,313 in meals relating to the bu

What are the strengths and weaknesses of the various costing methods and which would you recommend for a manufacturing enterpris? 2000word assay plus appendix

(a) Describe briefly how the following are used in the accounting for labour: (i)   time sheets (ii)   job cards. (b) The following details relate to the labour in a produ

manufacturing costs will not include a. indirect material used b. sales salaries expense c. indirect labor costs d. depreciation of factory equipment

#purchase price R45 order costs R175 lead time 6 days cost of capital (after taxation) 20% direct inventory holding costs R25 annual demand 8500 units business operational 330day p