Example 3: Earned Materials Labor and Machine Hours - Costing

Earned Hours determined by the standard routing

40 hrs @ $20.00/hr ($800.00)

The system moves production to inventory at the rolled cost of the standard routing cost: $800.00

WC Labor WIP Value: decreased by $800.00

Accounting:

DR $800.00 (Inventory Acct)

CR $800.00 (Labor WIP Acct)