Question: I need a advice here. Why is there a direct-materials inventory account but no direct-labor inventory account on a manufacturing company's balance sheet? A. Direct-labor

I need a advice here.

Why is there a direct-materials inventory account but no direct-labor inventory account on a manufacturing company's balance sheet?

Direct-labor costs are incurred at the same time the direct labor is used in production. Unlike direct materials, it is not purchased and stored for future use. Therefore, there is no direct-labor inventory account.

Direct-labor costs are incurred at the same time the direct labor is used in production. Therefore, during production, the direct labor and direct materials accounts are combined, and direct labor is included in the raw-materials inventory on the company's balance sheet.

Many direct-labor costs are incurred before the direct labor is used in production. Therefore, direct labor is included as a period cost and never becomes part of inventory.

Direct-labor costs are paid after the direct labor is used in production. Unlike direct materials, it is not purchased in advance and stored for future use. Therefore, direct labor incurred in the production process is included in the indirect production costs account as a period cost.

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