Labour Cost Accounting

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It is concerned with identifying the amount of labour costs to be changed to jobs and overhead accounts. Where a manufacturing organization operates a job costing system, information on the labour costs should be properly captured from the following documents:-

i) Job Cards: This is open for each job, when the job is started, the time of starting is entered on the job card and when it is completed, the completion time is also entered. The difference between the two is the time spent on the job on which time rate should be applied.

ii) Time Sheet: This analyses the time spent on the job. All the details relating to the time spent on the job showing factors such as; • Real job time
• Idle time
• Overtime.

(iii)Clock Cards: Employers whose wages are calculated on time basis will need to clock in and out of their work places. The clock number is assigned to each employee and on his arrival, his card is inserted in an automatic clock that prints the time of arrival. On departure, the card is again inserted in the clock and the difference between the two is the time in attendance which will be paid for in the appropriate rate. This system checks on late coming and absenteeism.

(iv)Wages Sheet (Payroll)
All the employees are listed on the wages sheet, alphabetically or in accordance to their serial numbers, the hours worked by each employee are entered on the wage sheet from the clock card and multiplied by the rate of pay. It contains gross pay;

• Overtime pay
• Basic pay
• Bonus and
• Any allowances and deductions such as NSSF, PAYE and advance.


|Employees |Time Worked |Pay |Deductions | |

No. |Name | |Basic |Overtime |Bonus |Gross |NSSF |PAYE |ADMN. |TOTAL |NET PAY |SING...
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