Answer:
Dr Work In Progress $144,000
Dr Direct Labor Cost Variance $1,000
Cr Wages Payable $145,000
Explanation:
The first step would be to calculate the direct labor variance which is calculated as under:
Direct Labor Cost Variance = Standard Labor Cost of Actual Production - Actual Labor Cost for Actual Production
Standard Labor Cost of Actual Production = Standard Labor Cost * Actual Production
Here
Actual Production is 4,800 Units and standard labor cost is 3 Hrs at $10 per hour which means:
Standard Labor Cost of Actual Production = 4,800 Units * 3 Hrs * $10 per Hr
= $144,000
Actual Labor Cost for Actual Production is $145,000
By putting the values in the above equation, we have:
Direct Labor Cost Variance = $144,000 - $145,000 = ($1,000) Unfavorable
The double entry would be:
Dr Work In Progress $144,000
Dr Direct Labor Cost Variance $1,000
Cr Wages Payable $145,000
