Question

Cavy Company accumulated 590 hours of direct labor on Job 345 and 800 hours on Job 999. The direct labor was incurred at a rate of $18 per direct labor hour for Job 345 and $23 per direct labor for Job 999.
Required:
Journalize the entry to record the flow of labor costs into production.

Answer 1

Answer:Please see explanation below

Explanation:

Labor Cost for Job 345 = Labor Hours × Direct labor rate

= 590 hours × $18 = $10,620

Labor Cost for Job  999.= Labor Hours × Direct labor rate

800 hours × $23=   $18,400

Total Labor cost == $10,620 + $18,400 = $29,020  

So since the assets increases, Work in process is debited and wages payable credited as it increases the liabilities.

The journal entry to record the flow of  labor costs into production is given as

Journal to record the flow of labor cost

Account titles and explanation      Debit                   Credit

Work in process                           $29,020

       To Wages payable                                                   $29,020