Both direct labor and indirect labor are recorded in the Work in Process Inventory account as the product is being manufactured.

Question

Quizplus · Accepted Answer

Both direct labor and indirect labor are considered as part of the cost of manufacturing a product and are recorded in the Work in Process Inventory account. Direct labor refers to the wages or salaries paid to employees who work directly on the production line, while indirect labor refers to the wages or salaries paid to employees who support the production process but do not work directly on the product, such as supervisors, maintenance workers, and inspectors. Both types of labor costs are allocated to the Work in Process Inventory account as the product is being manufactured.

Both Direct Labor and Indirect Labor Are Recorded in the Work