Wilturner Company incurs $94,000 of labor related directly to the product in the

Question

Wilturner Company incurs $94,000 of labor related directly to the product in the Assembly Department, $43,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $30,000 of labor for services that help production in both the Assembly and Finishing departments. The journal entries to record the labor would include: Debit Work in Process Inventory $137,000; debit Factory Overhead $30,000. Debit Work in Process Inventory $94,000; debit Wages Expense $73,000. Debit Work in Process Inventory $94,000; debit Factory Overhead $73,000. Debit Work in Process Inventory $137,000; debit Wages Expense $30,000. Debit Work in Process Inventory $167,000.

Explanation / Answer

The direct labor cost is debited to WIP and indirect labor is debited to factory overhead. So

The correct option is:

Debit Work in Process Inventory $94,000; debit Factory Overhead $73,000

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