If direct labor for the month is $40,000,overhead is applied based on direct labor,annual overhead is $600,000,and annual direct labor is $1,000,000,what is the entry to charge direct labor to production?

Question

Quizplus · Accepted Answer

To charge direct labor to production, the entry is to debit Work-in-Process Inventory for the direct labor cost and credit Payroll for the same amount. This reflects the movement of direct labor costs into the production process.

If Direct Labor for the Month Is $40,000,overhead Is Applied