Escuchar Products, a producer of DVD players, has established a labor standard f

Question

Escuchar Products, a producer of DVD players, has established a labor standard for its product—direct labor: 2 hrs at $9.75 per hour. During January, Escuchar produced 12,300 DVD players. The actual direct labor used was 24,040 hours at a total cost of $237,996.

1. Compute the labor rate and efficiency variances.

2. Prepare journal entries on Jan. 31 for all activities relating to labor. Refer to the Chart of Accounts for the exact wording of account titles.

PAGE 10

GENERAL JOURNAL

1

2

3

4

CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Supplies 132 Prepaid Insurance 141 Materials 142 Work in Process 143 Overhead Control 144 Finished Goods 170 Land 180 Equipment 181 Accumulated Depreciation LIABILITIES 210 Accounts Payable 220 Accrued Payroll 230 Utilities Payable 240 Lease Payable EQUITY 310 Common Stock 320 Retained Earnings REVENUE 410 Sales EXPENSES 510 Cost of Goods Sold 511 Materials Price Variance 512 Materials Usage Variance 513 Labor Efficiency Variance 514 Labor Rate Variance 520 Insurance Expense 530 Wages Expense 540 Supplies Expense 550 Utilities Expense 560 Depreciation Expense 590 Miscellaneous Expense

Explanation / Answer

1 Labor rate variance = 237996-(24040*9.75)= 3606 U Labor efficiency variance = 9.75*(24040-12300*2)= 5460 F 2 31-Jan Work in Process 239850 Labor Rate Variance 3606         Labor Efficiency Variance 5460         Accrued Payroll 237996

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.