Farrel Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: What is the journal entry to record the direct and indirect labor costs incurred during the year?

Question

Farrel Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year:  What is the journal entry to record the direct and indirect labor costs incurred during the year?

Quizplus · Accepted Answer

The journal entry to record direct and indirect labor costs is to debit the Work in Process account for the amount of direct labor and indirect labor costs incurred, and credit the Wages Payable account for the same amount. Choice B correctly reflects this journal entry by debiting Work in Process for $150,000 and crediting Wages Payable for the same amount.

Farrel Corporation Is a Manufacturer That Uses Job-Order Costing