Question

During the current month, a company that uses job order costing incurred a monthly factory payroll of $180,000. Of this amount, $40,000 is classified as indirect labor and the remainder as direct. Prepare journal entries to record these transactions.

1. Record the cost of direct labor used.
2. record the cost of indirect labor used.

Answer 1

Step-by-step explanation:

JOURNAL ENTRIES:

Transaction 1;

Work in process inventory:- 140,000 debit

Factory wages payable:- $140,000 credit

Transaction 2;

Factory overhead:- $40,000 debit

Factory wages payable:- $40,000 credit

Transaction 3;

Factory work in process:- $180,000 debit

Cash:- $180,000 credit