The journal entry to assign $1,500 of direct labour and $200 of indirect labour involves a debit to

Question

Quizplus · Accepted Answer

Direct labour cost is recorded in the work in process inventory account, which is a part of the manufacturing process. Therefore, a debit for $1,500 will be made to the work in process inventory account. Indirect labour, on the other hand, is recorded in the manufacturing overhead account, since these are indirect costs incurred in the manufacturing processes. Therefore, a debit of $200 will be made to the manufacturing overhead account. So, the correct entry will be a debit to work in process inventory for $1,500 and manufacturing overhead for $200. Option D is the right choice.

The Journal Entry to Assign $1,500 of Direct Labour and $200