Problem - The gross earnings of the factory workers for Vargas Company during the month of January are $65,400. The employer's payroll taxes for the factory payroll are $8,900. The fringe benefits to be paid by the employer on this payroll are $5,700. Of the total accumulated cost of factory labor, 85% is related to direct labor and 15% is attributable to indirect labor.
(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.