Direct labor and indirect labor are recorded, respectively, to:

a. Factory Overhead and Work in Process Inventory.
b. Work in Process Inventory and Finished Goods Inventory.
c. Finished Goods Inventory and Work in Process Inventory.
d. Work in Process Inventory and Factory Overhead.
e. Cost of Goods Sold and Finished Goods Inventory.

The correct answer is letter "D": Work in Process Inventory and Factory Overhead.

Explanation:

Work In Process Inventory is the account on the company's Balance Sheet that tracks the total costs of unfinished products currently in the process of production such as direct labor or raw materials costs.  

Factory overhead is the account used to record costs to be paid, even if the company is not receiving any profits from them. Without overhead expenses such as insurance, rent, employees' compensation, and accounting and legal expenditures the company would not be able to operate.

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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