The gross earnings of factory workers for Dinkel Company during the month of January are $400,000. The employer's payroll taxes for the factory payroll are $48,000. Of the total accumulated cost of factory labor, 75% is related to direct labor and 25% is attributable to indirect labor. Prepare the entry to record the factory labor costs for the month of January.

The entry to record the factory labor costs for the month of January.

Date   Amount title and Explanation     Post ref       Debit         Credit

             Factory labor                                              $448,000

            Factory wages payable                                                   $400,000

         Employer payroll taxes payable                                        $48,000'

         (To record the factory labor cost)

Explanation:

Factory labor = $400,000 + $48,000

= $448,000

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