Oxford Company uses a job order costing system.In the last month,the system accumulated labor time tickets total $24,600 for direct labor and $4,300 for indirect labor.How are these costs recorded?
A)Debit Payroll Expense $28,900; credit Cash $28,900.
B)Debit Payroll Expense $24,600; debit Factory Overhead $4,300; credit Factory Wages Payable $28,900.
C)Debit Work in Process Inventory $24,600; Debit Factory Overhead $4,300; Credit Factory Wages Payable $28,900.
D)Debit Work in Process Inventory $24,600; credit Factory Wages Payable $28,900.
E)Debit Work in Process Inventory $28,900; credit Factory Wages Payable $28,900.

Question

Quizplus · Accepted Answer

In a job order costing system, direct labor costs are charged directly to the Work in Process Inventory account, and indirect labor costs are charged to the Factory Overhead account. The total labor cost is credited to Factory Wages Payable. Therefore, option C correctly reflects the accounting treatment for both direct and indirect labor costs.

Oxford Company Uses a Job Order Costing System