Question

The Assembly Department produced 5,000 units of product during March. Each unit required 2.20 standard direct labor hours. There were 11,500 actual hours used in the Assembly Department during March at an actual rate of $17.60 per hour. The standard direct labor rate is $18.00 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.

Answer 1

Answer:

The journal entry is as follows:

Explanation:

Work in Progress A/c............................................Dr    $198,000

Labor efficiency variance(unfavourable)...........Dr   $9,000

                      Labor rate variance A/c........................Cr      $4,600

                      Wages Payable A/c.................................Cr    $202,400

Working Note:

Standard hour = Standard direct labor hours × (Standard hour - Actual hour)

= $2.2 × 5,000

= $11,000

Labor efficiency variance = $18 ×  (11,000 - 11,500)

= $18 × 500

= $9,000

Standard cost = Standard rate ×  Standard hour

= $18 × 11,000

= $198,000

Actual Cost = Actual rate × Actual hour

= $17.6 × 11,500

= $202,400