In process costing,the journal entry to record direct labor costs incurred associated with units in a department would include a ________.
A) Debit to Accrued Payroll
B) Credit to Factory Overhead
C) Debit to Work-in-Process Inventory-Department Name
D) Credit to Finished Goods Inventory

Question

Quizplus · Accepted Answer

Direct labor costs are recorded as a debit to the Work-in-Process Inventory account for the specific department where the labor was performed. This helps track the cost of production per department and makes it easier to allocate overhead costs. Therefore, the correct option is a Debit to Work-in-Process Inventory-Department Name. Options A, B, and D do not reflect the correct accounting treatment for direct labor costs in process costing.

In Process Costing,the Journal Entry to Record Direct Labor Costs