Factory labor - baked. The accounting for the labor costs...

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Factory labor As the factory labor payroll is prepared and recorded, the payroll costs are split between those  employees who work in specific functions (departments) and those involved in the general functions  of the factory. The specific function costs are called direct labor and are assigned to work-in-process  inventory. The general factory labor costs are indirect labor costs that are added to factory overhead.  Unlike the accounting for payroll under the job order cost system, the employee does not have to be  physically involved in making a product to be assigned to a specific function. If a specific  maintenance worker or supervisor is assigned to the preparation function, their wages are allocated  to that function even though these workers are not directly involved in preparing the chips to be 
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Unformatted text preview: baked. The accounting for the labor costs for June includes the following journal entries, shown in the following table. General Journal Date Account Title and Description Ref. Debit Credit 20X2 June 30 Factory Labor 7,100 (B) * Wages Payable 7,100 Record payroll for June (D) Factory Overhead 1,800 Factory Labor 1,800 Indirect labor for June (G) Work-in-Process Inventory-Preparation 2,900 Date Account Title and Description Ref. Debit Credit Work-in-Process Inventory-Baking 500 Work-in-Process Inventory-Packaging 1,900 Factory Labor 5,300 Direct labor for June The balance in the factory labor account should be zero at the end of each period. Factor Labor (B) 7,100 1,800 (D) 5,300 (G) 7,100 7,100...
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Factory labor - baked. The accounting for the labor costs...

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