"QUESTION:Any help with the problem at the end of this post will be sincerely appreciated. I haveworked similar problems several time on the have the online checker tell me that"Factory Hourly Payroll is wrong" , I calculated it just as I did the salaries yet my answerfor it is marked incorrect. I assume that something must be done differently for thehourly as compared to the salaried calculation. The needed information is at thebeginning of this post and the actual problem that I need the values and % for is at theend. Again though, when I calculate the hourly using the original audited balance itresults as wrong even though this works fine for the salaries. Please provide all valuesand % you get so that I may compare. I realize the Sales Comm. is done differently butapparently the hourly must be as well? Thanks so very much.Amounts from Trial Balance:Audited Balance Preliminary Balance10/31/201510/31/2016Sales$58,583,900 $66,785,646Executive salaries 530,284649,215Factory hourly payroll10,603,817 10,958,864Factory supervisors salaries 701,956797,096Office salaries2,003,912 2,404,933Sales commissions2,496,977 2,829,500Additional Information:1. There has been a significant increase in the demand for Drop Line’s products.The increase in sales was due to both an increase in the average selling priceof four percent and an increase in units sold that resulted from the increaseddemand and an increased marketing effort.2. Even though sales volume increased there was no addition of executives, factorysupervisors, or office personnel.3. All employees including executives, but excluding commission salespeople, receiveda six percent salary increase starting November 1, 2015. Commission sales peoplereceive their increased compensation through the increase in sales.4. The increased number of factory hourly employees was accomplished by recallingEmployees that had been laid off. They receive the same wage rate as existing employees. Drop Line does not permit overtime.5. Commission salespeople receive a five percent commission on all sales on which acommission is given. Approximately 80 percent of sales earn sales commission. Theother 20 percent are "call-ins," for which no commission is given. Commissions areRequirement a_& b.Preliminary Balance Expected Value % Diff. from FormulaExecutive Salaries 649,215 ??Factory Hourly Payroll10,958,864? ?Factory Supervisor’s Sal. 797,096 ? ?Office Salaries2,404,933 ? ?Sales Commission2,829,500??ANSWER:Below are the calculations which will help to compute the expected values. I have tried best foryou to reach out the desired answer with adequate explanations that will make easy for you tounderstand the rationales behind each and every calculation. This will also clear your doubtsregarding how Factory hourly employee wages are calculated. You may write me back for anyfurther clarifications:Last YearAuditingBalances Expected10/31/2015 Values ExplanationsIncrease from last year = $8,201,746($66,785,646 - $58,583,900)Sales $58,583,900 $66,785,646 14% Increase ($8,201,746 / $58,583,900 * 100)Executives Salaries $530,284 $562,101 Increased 6% from last year Sales have increased by 14% (calculatedabove) and out of which 4% is increase fromsales price, this means remaining 10% is due tovolume increase. This volume increase willincrease the no. of hourly employees needed.Hence hourly employees wages along withincreased employees %age = $10,603,817 *1.10 = $11,664,199. After this calculation 6%of wage increase is proposed. Hence ExpectedFactory hourly payroll $10,603,817 $12,364,051 value = $11,664,199 * 1.06 = $12,364,051Factory supervisorssalaries $701,956 $744,073 Increased 6% from last yearOffice salaries $2,003,912 $2,124,147 Increased 6% from last yearOut of sales increase of $8,201,748 only on80%, Sales commission of 5% will be given.Hence increase in sales commission =Sales commissions $2,496,977 $2,825,047 $8,201,748 * 0.8 * 0.05 = $328,070Below is the final Answer for requirement a & b:Preliminary Expected %ageBalance Values DiffExecutives Salaries $649,215 $562,101 -13.42%Factory hourly payroll $10,958,864 $12,364,051 12.82%Factory supervisors salaries $797,096 $744,073 -6.65% Office salaries $2,404,933 $2,124,147 -11.68%Sales commissions $2,829,500 $2,825,047 -0.16% "