Martinez Manufacturing incurred $4000 for indirect labor in Department III.The journal entry to record indirect labor utilized,but not paid is ________.Process costing is used.
A) debit Manufacturing Overhead, $4000; credit Accounts Payable, $4000
B) debit Accounts Payable, $4000; credit Manufacturing Overhead, $4000
C) debit Manufacturing Overhead, $4000; credit Wages Payable, $4000
D) debit Wages Payable, $4000; credit Manufacturing Overhead, $4000

Question

Quizplus · Accepted Answer

Indirect labor costs are added to manufacturing overhead as they are incurred. Since the labor is utilized but not yet paid, the credit goes to Wages Payable, reflecting the company's obligation to pay these wages in the future.

Martinez Manufacturing Incurred $4000 for Indirect Labor in Department III