Bookkeeping for labor costs

RoseW

Hello,

Hope all of you are well.

I am studying MATs and am confused with transferring the labour costs to production & overheads accounts. The entries are as follows:
Cr. Wages control

Dr. Production (expense account) - direct labour
Dr. Production overhead (expense) - indirect labor (overtime premium, bonus, etc)
Dr. Administration - non production overhead, office staff etc

My question is: the figures in wages control account would have been Net Wages, which do not include the employer NIC, Employer Pension paid for labour costs that are attributable directly to production. Why is that?

I thought direct labour net wage + direct labour employer pension contribution + direct labour employer NIC should have been recorder in production account.

I appreciate any comments. Many thanks in advance.

anony123

Hi Rose, if you can provide a picture that should be great and I’ll try my best. I did take l3 last year.