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In a job-order costing system, indirect labor cost is usually recorded as an increase to___________.

User Annish
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Final answer:

In job-order costing, indirect labor cost increases the Manufacturing Overhead account since it's not directly traceable to specific products, but necessary for manufacturing and varies with production output.

Step-by-step explanation:

In a job-order costing system, indirect labor cost is usually recorded as an increase to Manufacturing Overhead. Indirect labor costs are not directly traceable to a specific product or service. Instead, they support the production process as a whole. Indirect labor can include wages for supervisors, maintenance crews, and other workers whose activities are necessary for the manufacturing environment but cannot be directly associated with specific job orders. As a variable cost, indirect labor would rise with an increase in production output, just as with raw materials or direct labor. However, as it is not directly attributable to a specific job, it is aggregated into the Manufacturing Overhead account and then allocated to individual jobs based on an appropriate allocation base such as machine hours or direct labor hours.

User AnEnigmaticBug
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