The entry to record the flow of direct labor costs into production in a job order cost accounting system is to
A) debit Factory Overhead, credit Work in Process
B) debit Finished Goods, credit Wages Payable
C) debit Work in Process, credit Wages Payable
D) debit Factory Overhead, credit Wages Payable

Question

Quizplus · Accepted Answer

Direct labor costs are added to the Work in Process account since they are a component of the cost of producing goods. This is accomplished by debiting the Work in Process account and crediting the Wages Payable account for the amount of direct labor costs incurred.

The Entry to Record the Flow of Direct Labor Costs