Recording Standards in Accounts The Assembly Department produced 1,000 units of
ID: 2521456 • Letter: R
Question
Recording Standards in Accounts
The Assembly Department produced 1,000 units of product during March. Each unit required 1.5 standard direct labor hours. There were 1,600 actual hours used in the Assembly Department during March at an actual rate of $12 per hour. The standard direct labor rate is $12.5 per hour.
Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31. For a compound transaction, if an amount box does not require an entry, leave it blank.
March 31 Work in Process ______ ______ Direct Labor Time Variance ______ _______ Direct Labor Rate Variance ______ _______ Wages Payable _______ ________
Explanation / Answer
Journal Entry Account Tittle & Explanation Debit Credit Work In Progress (1500 HourX $12.50) $18,750 Direct Labour Time Variance $1,250 Direct Labour Rate Variance $800 Wages Payable $19,200 Working note Direct Labour Time Variance ( SH-AH)SR = ((1000unit*1.5 Hour)-1600 Hour)$12.50=-$1250 Unfavourable Direct Labour Rate Variance ( SR-AR)AH = ($12.5-$12)1600=-$800 favourable
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