Make a journal entry at the end of each month to record

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Reference no: EM132741302

Thomas Inc. a manufacturer of plumbing stands for water and sewers, pays an employee bonus based on the production recorded in each calendar quarter. Normal production is set at a rate of 240,000 units per quarter. A bonus of $ 0.50 per unit is paid for any units outside of normal output for each quarter.

The bonus distribution is based on the following points:

participating employees Allowed Values for Each Employee

1 Factory manager 250
2 Production engineer 200
5 Factory supervisor 200
1 Warehouse keeper 100
5 Factory office clerk 10
150 Factory worker 20

Employee income is not penalized for any month in which output; is below the monthly average of normal production per quarter. If the output is below the monthly average, the shortfall is taken from the excess of the following month before bonuses are earned and paid to employees. At the end of March, cumulative actual production totaled 270,000 units for the quarter.

Requested:

Problem 1. Calculate the bonus amount owed to each group of employees. Round all calculations to three decimal places.

Problem 2. Make a journal entry at the end of each month to record the bonus liability based on the following production figures: January, 75,000 units; February, 94,000 units; March, 101,000 units. All bonuses will be charged to the Factory Overhead Controller.

Reference no: EM132741302

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