Question

During January, time tickets show that the factory labor of $6,700 was used as follows: Job 1 $2,330, Job 2 $1,780, Job 3 $1,590, and general factory use $1,000.

Prepare a summary journal entry to record factory labor used

Answer 1

To record the labor costs used, you make individual debits to the appropriate job cost accounts and a total credit to the Factory Labor account. Journal entries should reflect the specific labor costs allocated to each job and the factory overhead.

Step-by-step explanation:

The student is asking for a summary journal entry to record the factory labor costs used in various jobs during January, with a distribution of $6,700 total labor cost across Job 1, Job 2, Job 3, and general factory use. To record these expenses, individual debits to the job cost accounts for each job's labor expenses would be made, and a credit to the factory labor account, or wages payable, for the total labor used. The journal entry would specifically debit Job 1 with $2,330, Job 2 with $1,780, Job 3 with $1,590, and the factory overhead for $1,000, while crediting Factory Labor for $6,700.

The context provided illustrates how labor costs impact the total cost of production and can drive management's decisions to balance the use of labor and machinery, based on expenses and productivity. The provided examples reflect the dynamics between rising labor costs and the incentive to invest in technology to optimize operational efficiency.