Robinson Chemicals has 800 employees. Each employee earns two weeks of paid vacation per year. Vacation time not taken in the year earned can be carried over to subsequent years. During 2016, 200 employees took both weeks’ vacation, but at the end of the year, 600 employees had vacation time carryovers as follows:
Employees |
Vacation weeks earned but not taken |
200 |
0 |
350 |
1 |
250 |
2 |
800 |
During 2016, compensation averaged $587 a week per employee.
The salaries and wages expense to be accrued on December 31 for employees that earned but have not taken their vacation will be
Answer:
Given that:
350 empoyees have vacation earned but not taken of 1 week each.
250 empoyees have vacation earned but not taken of 2 week each.
During 2016, compensation averaged $587 a week per employee.
Hence:
Salaries and wages expense to be accrued on December 31 = (350 * 1 + 250 * 2) * 587 = $498,950
The salaries and wages expense to be accrued on December 31 for employees that earned but have not taken their vacation will be = $498,950
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