Question

Rorry Company uses a job cost system. Labor costs for the period were $21,000, of which $3,000 were indirect. The journal entry is:'

Answer 1

The journal entry is :

Debit : Work In Process $21,000

Credit : Direct Labor Cost $18,000

Credit : Indirect Labor Cost $3,000

Step-by-step explanation:

The Work In Process Account is used to accumulate the manufacturing costs during the production period. Debit this Account with any costs incurred in manufacturing to show increase in the Product Cost and Credit the respective labor accounts to show decrease or utilization of these accounts. Note the remainder of costs of $18,000 goes to direct labor.