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

Choice A is incorrect because it only records direct labor cost and does not include indirect labor cost.
Choice C is incorrect because it only records indirect labor cost and does not include the direct labor cost.
Choice D is incorrect because it does not include the total labor cost but only the indirect labor cost. 
Therefore, the best choice is B which records both direct and indirect labor costs by debiting the Work in Process account and crediting both the Direct Labor and Manufacturing Overhead accounts. The journal entry to record the direct and indirect labor costs is: 11ea7998_5eef_b980_911b_f5bc4c176d1d_TB2627_00_TB2627_00

Farrel Corporation Is a Manufacturer That Uses Job-Order Costing