Jetwell,Inc.incurred $4,000 for indirect labor in Department III.The journal entry to record indirect labor utilized is ________.

Question

Quizplus · Accepted Answer

Indirect labor is a part of manufacturing overhead, and it is not directly allocable to a specific product or job or employee. Therefore, the journal entry to record indirect labor utilized should increase the Manufacturing Overhead account and a corresponding liability account like Wages Payable. Option C is the correct choice because it debits the Manufacturing Overhead account and credits the Wages Payable account for $4,000. Option A is incorrect because it credits Accounts Payable instead of Wages Payable, which is not appropriate for indirect labor. Option B and D are incorrect because they either debit Accounts Payable or Wages Payable, which is not appropriate for indirect labor.