
Concept explainers
(a)
Direct labor cost
The employees working on particular job use time ticket to record the work done by them with respect to a particular job. The summary of time tickets is used for calculating direct labor cost for a particular job.
Factory
It includes all manufacturing costs except direct material cost and direct labor cost. Factory overhead cost includes all costs like indirect materials, indirect labor, factory power and factory
To record: the
(b)
Applied factory overhead
The company applies factory overhead using predetermined factory overhead rate. The factory overhead applied is recorded in each job sheet which consists of direct labor hour and predetermined overhead rate.
To record: Journal entry the factory overhead applied in the books of T Industries.

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Chapter 2 Solutions
Managerial Accounting
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