Chapter 3 - Bookkeeping For Labour Costs

Question 1

What control account is used to charge labour costs to the various cost, profit and investment centres of a business ?

Answer 1

Wages Control Account

Question 2

Bookkeeping for Labour Costs

What Labour costs are charged to the production account?

Answer 2

Direct Labour Costs

Question 3

Bookkeeping for Labour Costs

What Labour costs are charged to the production overheads account ?

Answer 3

Indirect Labour Costs

*Eg. Factory supervisor

Question 4

Bookkeeping for Labour Costs

What **Labour costs **are charged to the Non-production overheads account ?

Answer 4

Administration Labour costs

*Eg. Office staff

Question 5

What are production overheads also ofter reffered to as ?

Answer 5

Operating Overheads

Question 6

What are Non-production overheads also ofter reffered to as ?

Answer 6

Non-Operating Overheads

Question 7

When transfering the direct labour costs to the production account in the ledger the two accounts involved would be the wages control account and the production account, which account will be debited and which will be credited ?

Answer 7

• Debit - Production account
• Credit - Wages control account

Question 8

When transfering the indirect labour costs to the production overheads account in the ledger the two accounts involved would be the wages control account and the production overheads account, which account will be debited and which will be credited ?

Answer 8

• Debit - Production overheads account
• Credit - Wages control account

Question 9

When transfering the administration labour costs to the Non-production overheads account in the ledger the two accounts involved would be the wages control account and the Non-production overheads account, which account will be debited and which will be credited ?

Answer 9

• Debit - Non-Production overheads account
• Credit - Wages control account