If Department N incurred direct labor cost of $22,000 and Department O incurred direct labor cost of $43,000,the following journal entry would be recorded by the process cost accounting system:
$\begin{array}{llr}
\text {Factory Payroll } &65,000\
\text { Goods in Process Inventory, Department N } &&22,000\
\text { Goods in Process Inventory, Department O } &&43,000
\end{array}$

Question

If Department N incurred direct labor cost of $22,000 and Department O incurred direct labor cost of $43,000,the following journal entry would be recorded by the process cost accounting system:
 $\begin{array}{llr}
  \text {Factory Payroll  } &65,000\
 \text {  Goods in Process Inventory, Department N } &&22,000\
 \text { Goods in Process Inventory, Department O } &&43,000
\end{array}$

Quizplus · Accepted Answer

The journal entry would not be recorded solely based on the information provided. Direct labor costs need to be allocated to specific production units or batches before they can be recorded in the process cost accounting system.

If Department N Incurred Direct Labor Cost of $22,000 and Department