When direct labor costs are recorded in a job costing:
A)Factory Wages Payable is debited and Work in Process Inventory is credited.
B)Work in Process Inventory is debited and Factory Wages Payable is credited.
C)Cost of Goods Manufactured is debited and Direct Labor is credited.
D)Direct Labor and Indirect Labor are debited and Factory Wages Payable is credited.
E)Work in Process Inventory is debited and Factory Overhead is credited.

Question

Quizplus · Accepted Answer

When direct labor costs are incurred, they are recorded in the Work in Process Inventory account, which is a component of the Manufacturing Overhead account. Therefore, Work in Process Inventory is debited, and Factory Wages Payable is credited.

When Direct Labor Costs Are Recorded in a Job Costing