In a job-order costing system, direct labor costs are ordinarily charged to:

Question

Quizplus · Accepted Answer

Direct labor costs are a direct cost of a specific job, and hence are charged to the job cost sheet. This allows for accurate calculation of the total cost of a job, which is necessary for pricing decisions and profitability analysis. The other choices are not correct because manufacturing overhead incurred is an indirect cost, cost of goods sold is an expense account that recognizes the cost of goods sold during a period, and finished goods is an inventory account.

In a Job-Order Costing System, Direct Labor Costs Are Ordinarily