During January, its first month of operations, Knox Company accumulated the foll

Question

During January, its first month of operations, Knox Company accumulated the following manufacturing costs: raw materials $4,960 on account, factory labor $6,170 of which $5,835 relates to factory wages payable and $335 relates to payroll taxes payable, and utilities payable $2,740. During January, time tickets show that the factory labor of $6,170 was used as follows: Job 1 $2,380, Job 2 $1,750, Job 3 $1,616, and general factory use $424 Prepare a summary journal entry to record factory labor used

Explanation / Answer

The journal entry to record factory labor used is as under:

Work in Process Inventory                       $5,746

Manufacturing Overhead                             $   424

                        Factory Labor                                      $6,170

Work in process inventory= ($2,380+$1,750+$1,616)= $5,746

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