COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Debit indirect labor, credit manufacturing overhead
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Debit indirect labor, credit direct labor
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Debit manufacturing overhead, credit raw material inventory
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Debit manufacturing overhead, credit factory labor
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Detailed explanation-1: -The entry to record the indirect material is to debit manufacturing overhead and credit raw materials inventory. Indirect labor records are also maintained through time tickets, although such work is not directly traceable to a specific job.
Detailed explanation-2: -The indirect labour cost will be debited to the production overhead control account, to be collected with all the other production overheads for later absorption into the cost of production for the month.
Detailed explanation-3: -Summary Journal Entry As a manufacturing firm, you list the direct labor expense separately from your indirect labor and wages paid to other employees. The journal entry to record payroll is to debit Direct Labor Expense, debit Salaries Expense, and debit Payroll Taxes Expense.
Detailed explanation-4: -Find out the direct labor amount involved in the production process within the reported period. It is recorded as a debit to “WIP” and as a credit to “salaries/wages payable”. The salary/wage expenses related to the production within the reported period represent the direct labor amount. 3.