Answer:
The entry to record factory payroll is as follows
For direct labor
Work in process ( direct labor) $ 134,000 Dr
Factory Overhead Payroll Account $ 134,000 Cr
For indirect labor
Factory Overhead (indirect labor) $ 51,000 Dr
Factory Overhead Payroll Account $ 51,000 Cr
No entry is made on any job - cost record, since indirect labor is not traceable to any particular job. In practise the above entries are combined to one compound entry as follows
Work in process ( direct labor) $ 134,000 Dr
Factory Overhead (indirect labor) $ 51,000 Dr
Factory Overhead Payroll Account $ 185,000 Cr
The total payroll is allocated to individual accounts for direct and indirect labor costs.
Answer:
Dr Work-in-process inventory $134,000.00
Cr factory wages payable $ 134,000.00
Dr Factory overhead $51,000.00
Cr Factory wages payable $51,000.00
Explanation:
The direct cost of factory wage is to be debited to work-in-process inventory because it is a direct cost of labor which forms part of the prime costs and a credit to factory wages payable as follows:
Dr Work-in-process inventory($185000-$51000) $134,000.00
Cr factory wages payable $ 134,000.00
Besides,the indirect labor cost is debited to factory overhead and credited to factory wages payable as follows:
Dr Factory overhead $51,000
Cr Factory wages payable $51,000
