Question

The following events took place at a manufacturing company for the current year: (1) Purchased $95,000 in direct materials. (2) Incurred labor costs as follows: (a) direct, $56,000 and (b) indirect, $13,600. (3) Other manufacturing overhead was $107,000, excluding indirect labor. (4) Transferred 80% of the materials to the manufacturing assembly line. (5) Completed 65% of the Work-in-Process during the year. (6) Sold 85% of the completed goods. (7) There were no beginning inventories. What is the journal entry to record the direct labor costs for the period? A. Labor Inventory XXX Wages Payable XXX B. Work-In-Process Inventory XXX Wages Payable XXX C. Manufacturing Overhead Control XXX Wages Payable XXX D. Wages Expense XXX Cash XXX

          The following events took place at a manufacturing company for the current year: 
(1) Purchased $95,000 in direct materials. 
(2) Incurred labor costs as follows: 
(a) direct, $56,000 and 
(b) indirect, $13,600. 
(3) Other manufacturing overhead was $107,000, excluding indirect labor. 
(4) Transferred 80% of the materials to the manufacturing assembly line. 
(5) Completed 65% of the Work-in-Process during the year. 
(6) Sold 85% of the completed goods. 
(7) There were no beginning inventories. 
What is the journal entry to record the direct labor costs for the period? 
A. Labor Inventory XXX Wages Payable XXX 
B. Work-In-Process Inventory XXX Wages Payable XXX 
C. Manufacturing Overhead Control XXX Wages Payable XXX 
D. Wages Expense XXX Cash XXX

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Added by Jose Antonio G.

Principles of Economics

Gregory Mankiw 8th Edition

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Solved by Expert Jonathan Tapiwa

04/25/2022

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Step 1: Identify the direct labor cost incurred, which is $56,000. Show more…

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The following events took place at a manufacturing company for the current year: (1) Purchased $95,000 in direct materials. (2) Incurred labor costs as follows: (a) direct, $56,000 and (b) indirect, $13,600. (3) Other manufacturing overhead was $107,000, excluding indirect labor. (4) Transferred 80% of the materials to the manufacturing assembly line. (5) Completed 65% of the Work-in-Process during the year. (6) Sold 85% of the completed goods. (7) There were no beginning inventories. What is the journal entry to record the direct labor costs for the period? A. Labor Inventory XXX Wages Payable XXX B. Work-In-Process Inventory XXX Wages Payable XXX C. Manufacturing Overhead Control XXX Wages Payable XXX D. Wages Expense XXX Cash XXX

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Transcript

00:01 Okay, so we are going to be doing an analysis of a manufacturing company.

00:05 So the information that we're given is this manufacturing company actually purchased at 9 ,000 indirect materials.

00:16 So 95 ,000 of indirect materials.

00:26 And then the other piece of information that is given is that incurred labor costs as follows.

00:33 The is direct labor cost, which is put it here, direct labor, dl is given as 56 ,000, and the is indirect labor given as the 18 ,600 other manufacturing overheads, picturing overheads were given as 1 or 7 ,000 and excluding indirect labor.

01:19 Transferred 80 % of the materials to the manufacturing assembly line.

01:24 So 80 % of material transferred.

01:34 Okay, so we get a picture here of the manufacturing plant and the manufacturing process.

01:43 So completely 65 % of the working process during the year, sold 85%.

01:52 So completed 65 % work in process, and then sold 85 % of the completed goods.

02:13 Okay, so that's quite an analysis.

02:16 So what does the question require of us? there are no beginning inventories.

02:21 What is the general entry to record the labour cost for the period? okay, so there are several options that were given.

02:31 Okay, so which one, which account do we debit, which one do we credit? so let's look at the options...

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