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.
You must be a registered user to add a comment. If you've already registered, sign in. Otherwise, register and sign in.