P4-1 Hansel Corporation provided the following data:

No. of employees at the beginning of the month 600

No. of employees at the end of the year 640
No. of employees resigned 40
No. of employees discharged 20
No. of employees replaced 10

Required: Calculate the labor turnover by applying three methods:

a. Separation method
b. Replacement method
c. Flux method

PROBLEM 4-1
LABOR
METHOD CALCULATION TURNOVER
RATE %
a. Separation method 40+10
x 100 8.06
620

b. Replacement method 20
x 100 3.23
620

c. Flux method 40+10+20

x 100 11.29
620
 P4-2 Hakone Company determined P284,200 payroll for the week consisting of P240,000 earned by 80
direct laborers and P44,200 earned by 20 indirect laborers. The total factory bonuses to be paid at year-end
is estimated at P980,000. All factory workers receive a three-week paid vacation and 10 paid holidays.

Required: Prepare the journal entries to: (a) distribute the weekly payroll and to (b) accrue the bonus,
vacation, and holiday pay.

a. Distribute the weekly payroll

Work in process inventory 240,000.00
Payroll 240,000.00
to record the weekly payroll distribution to direct laborers

Factory overhead control 44,200.00

Payroll 44,200.00
to record the weekly payroll distribution to indirect laborers

Direct labor
Work in process inventory 183.67
Accrued expense 183.67
to record vacation pay

Work in process inventory 122.45

Accrued expense 122.45
to record holiday pay

Indirect labor
Factory overhead control 135.31
Accrued expense 135.31
to record vacation pay

Factory overhead control

Accrued expense 90.20
to record holiday pay 90.20
b.1 Accrue the bonus, vacation, and holiday pay
year end bonus
Bonus per week =
no. of working week in a year

980,000.00
=
49
Bonus per week = 20,000.00

b.2
Salary per week x no. of paid holidays
Vacation pay per week =
no. of working week in a year

(240,000/80) x 3
=
49
9,000.00
=
49
= 183.67
Direct labor

(44,200/20) x 3
Indirect Labor =
49
6,630.00
=
49
Indirect Labor = 135.31

b.3 Holiday pay per week Salary per week x no. of paid holidays
=
no. of working week in a year

(3000/5) x 10
=
49
Direct labor = 122.45

(2210/5) x 10
=
49
Indirect labor = 90.20