Chapter 20, Problem 9Q

To determine

Cost of labor:

The cost of labor can be defined as the sum of all wages paid to employees. It also involves the cost of employee benefits and payroll taxes paid by an employer. The labor costs can be divided into direct costs and indirect costs or overhead costs.

The source document used in accumulating direct labor costs is labor time tickets. Such type of document holds information related to the labor time consumed by a specific job or task. A labor might work on various jobs during the day, but the time spent by him on a specific job is only identified.

The labor time put on that specific job is identified. The labor time put on that specific job is added and the cost of it is transferred to work in process account.

To determine: The documents used in assigning materials and labor costs and the entry for each document.