This is a great work-around. But, I could use a bit more guidance on including other costs, like labor and other overhead.
I'm imagining a scenario like this:
Buy Labor (that will eventually be a direct cost of assembly)
Payroll Expense: debit + cost of labor
Bank: debit - cost of labor
Use Labor in Production
WIP bank: debit + cost of labor
CONFUSION (retained earnings? income account? Payroll Expense?)
I don't want to take away from my payroll expense and put it in WIP, as the bosses like to see how much we spend on that kind of thing.
I am tempted to credit Retained Earnings, but maybe an income account would be better for including the cost of labor in the WIP?
Apologies if I've gone in a completely wrong direction.
