Question

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 was direct and $73,000 was indirect supervisory costs. The correct journal entry to record the $73,000 indirect labor for the month is: _____A. Debit Supervisor Wage Expense; credit Factory Wages Payable. B. Debit Factory Overhead; credit Factory Wages Payable. C. Debit Supervisor Wage Expense; credit Factory Overhead. D. Debit Factory Wages Payable; credit Factory Overhead. E. Debit Factory Wage Expense; credit Cash.

Answer 1

Option (B) is correct.

Step-by-step explanation:

Given that,

Labor costs for construction jobs completed during the month of August = $285,000

Direct labor cost = $212,000

Indirect labor cost = $73,000

Therefore, the Journal entry is as follows:

Factory overhead A/c Dr. $73,000

To Factory Wages Payable $73,000

(To record the indirect labor for the month)