Question

Cavy Company accumulated 560 hours of direct labor on Job 567 and 820 hours on Job 888. The direct labor was incurred at a rate of $15 per direct labor hour for Job 567 and $25 per direct labor for Job 888. Journalize the entry to record the flow of labor costs into production. If an amount box does not require an entry, leave it blank. Work in Process

Answer 1

Answer:

Dr work-in-process  $ 28,900.00  

Cr wages payable                              $ 28,900.00  

Explanation:

The total amount of labor costs incurred on both jobs would be debited to work in process account , while the credit entry would be posted to the wages payable account.

Total labor cost incurred=(560*$15)+(820*$25)=$28,900.00  

The amount is debited to work in process so as to add up to other direct costs of production while entry into wages payable indicates that employees are being owed.