Asked by Natalia Montenegro on Jun 05, 2024
Verified
In a process costing system,factory labor costs incurred in a reporting period are presented on the income statement as Factory Labor Expense.
Process Costing System
A costing method used for homogeneous products, allocating costs based on the process or department through which they pass.
Factory Labor Costs
The total expense incurred by a company for the labor used in the production of goods, including wages, benefits, and taxes.
Factory Labor Expense
Costs associated with the wages and benefits of factory workers directly involved in producing goods.
- Understand how factory labor costs and other direct costs are presented and accounted for.
Verified Answer
SC
Stephen ChandlerJun 07, 2024
Final Answer :
False
Explanation :
In a process costing system, factory labor costs incurred are typically allocated to work in process and not immediately expensed on the income statement; they become part of the cost of goods manufactured and are expensed as part of cost of goods sold when the product is sold.
Learning Objectives
- Understand how factory labor costs and other direct costs are presented and accounted for.