When assigning direct labour costs to the production process using a standard cost system, which of the following shows the effect on work in process inventory?

Question

Quizplus · Accepted Answer

In a standard cost system, the planned cost of direct labor is established based on the standard quantity of labor hours required to produce a single unit of a product or service multiplied by the standard rate per hour. As actual direct labour hours are incurred and assigned to work in process inventory, the inventory is debited for the standard quantity of direct labour used for actual production times standard cost per hour. Therefore, the correct option is D, which says that work in process inventory is debited for standard quantity of direct labour used for actual production times standard cost per hour.

When Assigning Direct Labour Costs to the Production Process Using