The following events took place at a manufacturing company for the current year: (1)Purchased $95,000 in direct materials.(2)Incurred labor costs as follows: (a)direct,$56,000 and (b)indirect,$13,600.(3)Other manufacturing overhead was $107,000,excluding indirect labor.(4)Transferred 80% of the materials to the manufacturing assembly line.(5)Completed 65% of the Work-in-Process during the year.(6)Sold 85% of the completed goods.(7)There were no beginning inventories.What is the journal entry to record the direct labor costs for the period?

Question

Quizplus · Accepted Answer

Direct labor costs are recorded in the Work-in-Process account, so the journal entry would be to debit Work-in-Process for $56,000 and credit Wages Payable for the same amount. Indirect labor costs would be recorded in the manufacturing overhead account. Option B reflects this accounting treatment.

The Following Events Took Place at a Manufacturing Company for the Current