Tuesday, May 22, 2012

Journal entry assigning Factory Payroll if using a job order cost accounting system?

Which journal entry to assign factory payroll if using a job order cost accounting system?

In the last several months, the total system accumulated labor time receipts totaling $24,600 for direct labor and $4,300 for indirect labor. All the costs were accumulated in factory payroll account when they were paid.

These are the relevant transactions:

a.  Payroll expense..... 28,900 cash.... 28,900
b.  payroll expense....24600 factory overhead......4300 factory payroll ....28900
c.  goods in process inventory.... 24600 factory overhead....4300 factory payroll....28900
d.  goods in process inventory....24600 factory overhead....4300 accrued wages payable....28900
e.  goods in process inventory....28900 factory payroll..... 28900

Accounting Answer:

b. payroll expende....24600 factory overhead......4300 factory payroll ....28900
(Indirect labor is an overhead cost).

No comments:

Popular Accounting Problems

The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.