O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare paid $2,100 to production employees who worked on Job #132.The entry to record these wages would include an increase to which of the following accounts?
A) Cost of Goods Sold.
B) Work in Process Inventory.
C) Finished Goods Inventory.
D) Wage Expense.

Question

Quizplus · Accepted Answer

The $2,100 paid to production employees for Job #132 is part of the direct labor cost incurred in the manufacturing process. Since this cost is directly attributable to the specific job, it should be recorded as an increase in the Work in Process Inventory account.

O'Hare Company Is a Manufacturing Firm That Uses a Job-Order