The journal entry to record June production activities for direct labor usage is:

A) Debit Factory Wages Payable $160,000; credit Cash $160,000.
B) Debit Work in Process Inventory $160,000; credit Factory Wages Payable $160,000.
C) Debit Cost of Goods Sold $160,000; credit Factory Wages Payable $160,000.
D) Debit Work in Process Inventory $160,000; credit Raw Materials Inventory $160,000.
E) Debit Work in Process Inventory $160,000; credit Cash $160,000.

Question

Ann Wallace DeRossette · Accepted Answer

Final Answer : B, Explanation :  The journal entry to record direct labor usage is to debit Work in Process Inventory, which represents the cost of the products that are still in the production process, and credit Factory Wages Payable, which represents the amount owed to the workers for their labor. Therefore, option B is the correct choice. Option A is incorrect because it is recording a payment instead of labor usage. Option C is incorrect because it is recording the cost of goods sold, which would come at the end of the production process. Option D is incorrect because it is recording the transfer of raw materials to the production process. Option E is incorrect because it is recording a payment instead of labor usage.

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