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Hello tutor,
I have a question related to the Wages control account.
On the debit side of this account we have: Bank, Payables (tax, National insurance, etc.). On the credit side we have: Work-in-progress (for direct labout cost), Production overheads (for indirect labour cost), and Statement of profit and loss (for Other labour costs (like employer contributions, etc.))
Can you please explain what it means with other labour costs on the credit side and why it is booked/transfered to SOPL?
Thank you tutor!
This isn’t really relevant for the current Paper MA exam.
However ‘other labour costs’ are costs not related to the production directly (employer contributions is a bad example, but there will be other labour in the company that has nothing to do with production such as administration). These costs are not production costs but are still costs for the business and so will appear in the SOPL.
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