Question

Prepare journal entries to record the following production activities.

1. Incurred \(75,000 of direct labor in production (credit Factory Wages Payable).

2. Incurred \)20,000 of indirect labor in production (credit Factory Wages Payable).

3. Paid factory payroll

Short answer

Both sides of the journal totals$190,000.

Step-by-step solution

Definition of Factory Overhead

Factory overhead can be defined as the expenses incurred in the factory by the business entity other than the direct material and direct labor. It refers to expenses such as salaries paid to supervisors and quality analysts.

Journal entries for production activities

Date	Accounts and Explanation	Debit ($)	Credit ($)
1	Work-in-process inventory	75,000
	Factory wages payable		75,000
2	Factory overhead	20,000
	Factory wages payable		20,000
3	Factory wages payable	95,000
	Cash		95,000
		$190,000	$190,000