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Former Member

Direct labor in COGS and Salary expense handling

What is the standard process in sap for handling direct labor?

As my understanding is that direct labor is part of COGS and is moved from Inventory to P&L at the time of GI. Hence will show as part of your COGS or expenses.

debit COGS

Credit Inventory.

Now when we have to pay the wages/salaries for those direct labor. Entries would

debit salary expense account

credit salaries payable

again putting your direct labor into your P&L under expenses.

Is this the correct process, as the process debit your expense account twice? Would your expense be over declared? I can't seem to figure out the accounting for this processs.

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