Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August,of which $212,000 was direct and $73,000 was indirect supervisory costs.The correct journal entry to record the $73,000 indirect labor for the month is:

A) Debit Supervisor Wage Expense; credit Factory Wages Payable.
B) Debit Factory Overhead; credit Factory Wages Payable.
C) Debit Supervisor Wage Expense; credit Factory Overhead.
D) Debit Factory Wages Payable; credit Factory Overhead.
E) Debit Factory Wage Expense; credit Cash.

Question

Georgina Balamoun · Accepted Answer

Final Answer : B, Explanation :  Indirect labor costs are part of factory overhead costs, which are not directly associated with the production of a specific product or service. Therefore, the correct journal entry is to debit Factory Overhead and credit Factory Wages Payable.

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