Accounting for labour costs, Cost Accounting

Assignment Help:

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.


Related Discussions:- Accounting for labour costs

Labour costs, what are the classifications of labour costs? what is employe...

what are the classifications of labour costs? what is employee psyche?

Group bonus plan, #question techniques of payment under group bonus plan ....

#question techniques of payment under group bonus plan .

Standard cost and standard costing, Standard Cost and Standard Costing ...

Standard Cost and Standard Costing To effectively control the costs of a certain organization, we require a yard stick to measure the real performance against. Traditionally,

Journal entry for sale of machinery, Rayya Co. purchases and installs a mac...

Rayya Co. purchases and installs a machine on January 1, 2013, at a total cost of $105,000. Straight-line depreciation is taken each year for four years assuming a seven-year life

Market-based transfer price optimal, Under what conditions is a market-base...

Under what conditions is a market-based transfer price optimal?

Economic order quality or eoq, Economic Order Quality or EOQ Define th...

Economic Order Quality or EOQ Define the model and the three methods of computing the EOQ. 1. Assumptions of the model. Illustration The given information was extra

The sales value basis., The following data relate to three joint products: ...

The following data relate to three joint products:                                                                               A                 B                     C

Profit variances, PROFIT VARIANCES Sales variances are important as the...

PROFIT VARIANCES Sales variances are important as they have a direct bearing on profits earned by the organization.   thus, they can be used as the basis of determining profit

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd