Direct labor and indirect labor are recorded, respectively, to:
A) Factory Overhead and Work in Process Inventory.
B) Work in Process Inventory and Finished Goods Inventory.
C) Finished Goods Inventory and Work in Process Inventory.
D) Cost of Goods Sold and Finished Goods Inventory.
E) Work in Process Inventory and Factory Overhead.

Question

Quizplus · Accepted Answer

Direct labor is recorded as a cost of work in process inventory, while indirect labor is recorded as a cost of factory overhead. Therefore, direct labor is recorded to work in process inventory and indirect labor is recorded to factory overhead, making choice E the correct answer.

Direct Labor and Indirect Labor Are Recorded, Respectively, To