Factory employees' wages should be incorporated into the Work in Process Inventory account.

Question

Quizplus · Accepted Answer

Wages paid to factory employees are considered direct labor costs and are therefore included in the Work in Process Inventory account along with other direct manufacturing costs. This account is used to track the costs of goods that are in the process of being manufactured. Once the goods are completed, they are transferred to the Finished Goods Inventory account, and the costs are then assigned to the cost of goods sold when the products are sold to customers.

Factory Employees' Wages Should Be Incorporated into the Work in Process