During October, Dorinirl Corporation incurred $69,400 of direct labor costs and

Question

During October, Dorinirl Corporation incurred $69,400 of direct labor costs and $5,600 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

credit to Work in Process of $69,400

debit to Work in Process of $75,000

debit to Work in Process of $69,400

credit to Work in Process of $75,000

During October, Dorinirl Corporation incurred $69,400 of direct labor costs and $5,600 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

Explanation / Answer

AS THE INDIRECT LABOUR COST IS NOT A PART OF MANUFACTURING COST IT WILL NOT BE INCLUDED IN THE WORK IN PROCESS.

JOURNAL ENTRY WILL BE

WORK IN PROCESS A/C........................................DR $69400

   TO DIRECT LABOUR COST $69400

CORRECT ANSWER IS DEBIT TO WORK IN PROCESS OF $69400

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