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ADMS 3510 (18)


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Administrative Studies
ADMS 3510
Rebecca Jubis

To Record Factory Labour Costs • The cost of factory labour consists of gross earnings of factory workers, employer payroll taxes, and fringe benefits incurred by the employer • Labour costs are debited to Factory Labour when they are incurred. Factory Labour is assigned to work in process and manufacturing overhead at the end of the period • Journal Entry 2: Labour Cost o Example: Wallace Manufacturing incurs $32,000 of factory labour costs, of which $27,000 relates to wages payable and $5,000 relates to payroll taxes payable in January Factory Labour 32,000 Factory Wages Payable 27,000 Employer Payroll Taxes Payable 5,000 To Record Factory Labour Costs ----------- To Record Manufacturing Overhead Costs • Overhead costs may be recorded periodically through adjusting entries by debiting Manufacturing Overhead • Manufacturing Overhead is a control account and the subsidiary ledger consists of individual accounts for each type of cost • Journal Entry 3: To Record Manufacturing Overhead Costs • Example: To Record Manufacturing Overhead Costs – See page 70 Manufacturing Overhead 13,800 Utilities Payable 4,800 Prepaid Insurance 2,000 Accounts Payable (For Repairs) 2,600 Accumulated Amortization
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