ECONOMICS

Detailed explanation-1: -When indirect labor is applied to a job in process, the manufacturing overhead account is debited. When indirect labor is recorded for a job in process, the work in process account is debited. Overapplied factory overhead that is material in amount is closed to cost of goods sold at year end.

Detailed explanation-2: -Direct labor is debited to the Work In Process inventory account and indirect labor is debited to the Manufacturing Overhead account.

Detailed explanation-3: -The difference between direct labor and indirect labor is that the indirect labor records the debit to manufacturing overhead while the credit is to factory wages payable.

Detailed explanation-4: -Any indirect material or indirect labor costs are debited to the Manufacturing Overhead control account, along with any other actual manufacturing overhead costs incurred during the period. Manufacturing overhead is applied to Work In Process using the predetermined rate.

Detailed explanation-5: -The cost of all indirect labor is considered factory overhead.