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The gross earnings of factory workers for Dinkel Company during the month of January are $400,000. The employer's payroll taxes for the factory payroll are $48,000. Of the total accumulated cost of factory labor, 75% is related to direct labor and 25% is attributable to indirect labor.Prepare the entry to record the factory labor costs for the month of January.

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Answer:

The entry to record the factory labor costs for the month of January.

Date   Amount title and Explanation     Post ref       Debit         Credit

             Factory labor                                              $448,000

            Factory wages payable                                                   $400,000

         Employer payroll taxes payable                                        $48,000'

         (To record the factory labor cost)

Explanation:

Factory labor = $400,000 + $48,000

= $448,000

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