the recording of direct labor will result in a: multiple choice question. debit to work in process inventory and credit factory wages payable debit to factory wages payable and a credit to work in process inventory debit to work in process inventory and a credit factory overhead debit to factory overhead and a credit work in process inventory

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25-10-2022
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the recording of direct labor will result in a: multiple choice question. debit to work in process inventory and credit factory wages payable debit to factory wages payable and a credit to work in process inventory debit to work in process inventory and a credit factory overhead debit to factory overhead and a credit work in process inventory

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sapanpandit sapanpandit · Answer 1 · 2022-11-07T16:50:46+01:00

Direct labour recording will result in a credit for Factory Wages Payable and a debit for Work in Process Inventory.

In any production round, items that are partially finished are referred to as "work in process" (WIP) inventory. The entire cost of unfinished goods currently being produced is referred to as work in process in manufacturing and supply chain management.

Higher WIP inventory levels are favourable since they can accommodate an increase in demand and shorten cycle times due to the additional manufacturing material. If demand is lower than anticipated, this could result in waste as well as higher storage costs and obsolescence risk.

Learn more about work in process inventory here:

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