During June, Buttrey Corporation incurred $78,000 of direct labor costs and $18,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:
A) debit to Work in Process of $78,000.
B) credit to Work in Process of $96,000.
C) debit to Work in Process of $96,000.
D) credit to Work in Process of $78,000.

Question

Quizplus · Accepted Answer

Direct labor costs are debited to Work in Process as they are directly attributable to the production of goods. Indirect labor costs are not debited to Work in Process but to Manufacturing Overhead.

During June, Buttrey Corporation Incurred $78,000 of Direct Labor Costs