this is a continuation of the preceding example where twill machinery is building a 635713

This is a continuation of the preceding example, where Twill Machinery is building a laying press for an antique book bindery. Twill pays its employees at the end of each month, and records the following payroll entry for its production department:

At the end of the month, Twill allocates the indirect labor in the overhead cost pool to the various open jobs. Of the $35,000 of labor in the overhead cost pool, Twill allocates $4,000 to Job 1200 with the following entry:

Twill completes work on the laying press and shifts all related labor costs to the finished goods inventory account. The entry is:

This final entry comes from the $8,000 of direct labor that was initially charged against Job 1200, and the $4,000 of indirect labor that was allocated to it.