Question

Journalizing the entry to record the indirect labor costs incurred for general factory use would include a debit to a.Wages Expense b.Factory Overhead c.Wages Payable d.Cost of Goods Sold

Answer 1

Answer: b.Factory Overhead

Explanation:

Indirect Labor Costs are those costs associated with people who helped the production process but were not directly involved in the production process.

For example, machinery repair men, the guards, the Accountants for the Factory and the Quality control people amongst others.

These costs are treated as an expense and Debited to the Factory Overhead Account in a general factor setting unlike direct Labor that will be Debited to to Work in Progress.