The gross earnings of the factory workers for Cepeda Company during the month of

Question

The gross earnings of the factory workers for Cepeda Company during the month of January are $60,000. The employer's payroll taxes for the factory payroll are $8,000. The fringe benefits to be paid by the employer on this payroll are $4,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor. Prepare the entry to record the factory labor costs for the month of January & Prepare the entry to assign factory labor to production.

Explanation / Answer

Debit $ Credit $ Wage and Salaries Expense 60,000 Fringe Benefits 4,000 Payroll Taxes Payable 8,000 Net Payroll Payable 56,000 Cost of Goods Manufactured 64,000 Direct Wages (85%*64000) 54,400 Indirect Wages (15%*64000) 9,600

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