If the indirect labor cost in August for clerical and maintenance that help production in all departments was $123,000, the following journal entry would be recorded in a process costing system:
$\begin{array}{llr}
\text { Factory Overhead } &123,000\
\text {Factory Wages Payable } &&123,000\
\end{array}$

Question

If the indirect labor cost in August for clerical and maintenance that help production in all departments was $123,000, the following journal entry would be recorded in a process costing system:
$\begin{array}{llr}
  \text { Factory Overhead } &123,000\
 \text {Factory Wages Payable  } &&123,000\
\end{array}$

Quizplus · Accepted Answer

This journal entry correctly records the indirect labor cost in a process costing system. The Factory Overhead account is debited for the total amount of the indirect labor cost, and the Factory Payroll Payable account is credited for the same amount, indicating that this amount is owed but not yet paid to the employees who performed the indirect labor tasks.

If the Indirect Labor Cost in August for Clerical and Maintenance