Western Industries pays employees on a weekly basis on Tuesday for the week ended the previous Friday.Employees' compensation is earned evenly each day over a 5-day work week.This year,April 30 fell on Thursday.Payroll costs for the week ended May 1 follow: Excluding payroll taxes,how much of the accrued payroll at April 30 should be charged to Factory Overhead?

Question

Western Industries pays employees on a weekly basis on Tuesday for the week ended the previous Friday.Employees' compensation is earned evenly each day over a 5-day work week.This year,April 30 fell on Thursday.Payroll costs for the week ended May 1 follow:  Excluding payroll taxes,how much of the accrued payroll at April 30 should be charged to Factory Overhead?

Quizplus · Accepted Answer

The accrued payroll at April 30 includes compensation for Thursday and Friday of that week. Since employee compensation is earned evenly each day over a 5-day workweek, only 2/5 or 40% of the accrued payroll should be charged to Factory Overhead.

Accrued payroll at April 30: $35,000 
Percentage earned by April 30: 40% 
Accrued payroll at April 30 to be charged to Factory Overhead: 
$35,000 x 40% = $14,000

Western Industries Pays Employees on a Weekly Basis on Tuesday