n a process costing system, factory labor costs incurred in a reporting period are presentedon the income statement as Factory Labor Expense

In a process costing system, factory labor costs incurred in a reporting period are not presented on the income statement as Factory Labor Expense. Instead, these costs are initially categorized as part of the inventory costs, which are considered assets.

Here are the steps:

1. Factory labor costs are first recorded as Work in Process Inventory. This is because the labor costs are tied to the products that are currently being manufactured but are not yet completed.

2. As the goods are finished, the associated labor costs (along with other manufacturing costs) are transferred from Work in Process Inventory to Finished Goods Inventory.

3. When the finished goods are sold, the costs (including the labor costs) are then recognized as Cost of Goods Sold (COGS) on the income statement.

So, in summary, factory labor costs in a process costing system move from Work in Process Inventory to Finished Goods Inventory, and finally to Cost of Goods Sold on the income statement. They are not directly recorded as Factory Labor Expense.