6 July, 09:21

During May, Bergan Company accumulated 2,500 hours of direct labor costs on Job 200 and 3,000 hours on Job 305. The total direct labor was incurred at a rate of \$28 per direct labor hour for Job 200 and \$24 per direct labor hour for Job 305. Journalize the entry to record the flow of labor costs into production during May.

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Answers (1)
1. 6 July, 12:09
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The Journal entry is as follows:

Work In Progress A/c Dr. \$142,000

To wages payable \$142,000

(To record the flow of labor costs into production)

Note:

1. Total Labor Cost for Job 200 = Labor Hours * Direct labor rate

= 2,500 * \$ 28

= \$ 70,000

2. Total Labor Cost for Job 305 = Labor Hours * Direct labor rate

= 3,000 * \$ 24

= \$ 72,000

3. Labor Cost = \$ 70,000 + \$ 72,000

= \$ 142,000
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