The example below shows how you would plan, record, and adjust direct labor costs for one month. Labor costs are recorded in account subclass 72, which consists of a series of expense accounts, a variance account, and a clearing account. Because these expenses are incurred during the manufacture of semifinished products, they are transferred to the semifinished products inventory account. All figures are given in Turkish liras (TRL).

1. At the beginning of the month, you plan to invest TRL 2,000,000 worth of direct labor – salary, social insurance, and ancillary payroll expenses – in semifinished products. To reflect this, you debit this sum to the semifinished products account and credit it to the direct labor costs clearing account.
2. Over the course of the month, you pay your employees' salaries, with social insurance and ancillary payroll expenses. You debit these amounts to the relevant expense accounts, and credit your own bank account (the credit postings are not shown in the diagram).
3. At month-end, you add up all the expenses in the subclass. The total salaries expense is TRL 1,700,000; social insurance expense amounts to TRL 130,000; and ancillary payroll expense is TRL 70,000. This adds up to TRL 190,000, which is TRL 100,000 less than you planned at the beginning of the month. You therefore debit this variance to the variance account and credit it to the semifinished products account.
4. You close the expense accounts and the variance account to the clearing account. The balance of the clearing account thus equals zero.