The gross earnings of the factory workers for Junhong Ltd. during the month of January are HK$760,000. The employer’s payroll taxes for the factory payroll are HK$80,000. The fringe benefits to be paid by the employer on this payroll are HK$60,000. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor.

Instructions

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

b. Prepare the entry to assign factory labor to production.