Question

Gardner Architects is in the process of developing house plans for six custom homes. Work tickets show that during the month of January 200 hours of labor were used on plans for custom home Project Number 3 and 100 hours of labor were used on plans for custom home Project Number 5. Labor costs average $60 per hour and are paid with cash. The entry to record these labor costs would:

Answer 1

Answer: This could be journalised as follows :-

Step-by-step explanation:

1. Direct labor cost A/C Dr..... $18,000

To cash A/C...... $18,000

(Being labor cost incurred on project two and three )

working notes :-

Total labor cost = (total hours worked) * (rate per hour)

= (100 hrs + 200 hrs) * ($60)

= $18, 000