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If Department R uses $60,000 of direct materials and Department S uses $15,000 of direct materials, the following journal entry would be recorded by the process costing system:
Variable Selling Expense
Expenses that fluctuate in direct proportion to sales volume, including commissions and freight fees.
Fixed Manufacturing Overhead
Expenses related to manufacturing that remain constant regardless of the number of units produced, including property taxes and rent for factory buildings.
Direct Labour
The work performed by individuals directly involved in the manufacturing of products or providing services, whose costs are directly attributable to the products or services.
Direct Materials
The raw materials and components that are directly used in the manufacturing of a product and can be directly attributed to that product.
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