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DL variances; journal entries Calista & Lane, CPAs, set the following standard for its inventory audit...

DL variances; journal entries
Calista & Lane, CPAs, set the following standard for its inventory audit of Triumph Co.: 560 hours at an average hourly rate of $250. The firm actually worked 528 hours during the inventory audit process. The total labor variance for the audit was $5,600 unfavorable.

a. Compute the total actual payroll. $Answer
b. Compute the labor efficiency variance.
Note: Do not use a negative sign with your answer.
Labor efficiency variance favorable or unfavorable
c. Compute the labor rate variance.
Note: Do not use a negative sign with your answer.
Labor rate variance favorable or unfavorable
d. Prepare the entry to assign labor costs to inventory, record the labor variances, and accrue payroll costs.
Note: Record any multiple debits or any multiple credits in alphabetical order by account name.

Solutions

Expert Solution

a)Standard labor cost =SH*SR

                    = 560 * 250

                   = $ 140000

Total Labor variance = Actual labor cost- standard labor cost

5600 U= Actual labor cost - 140000

Actual labor cost = 5600+ 140000

                      = 145600

Actual payroll = $ 145600

b)

Labor efficiency variance = SR [AH-SH]

                     = 250 [528 -560 ]

                    = 250 *- 32

                    = - 8000 F   (enter as 8000 F as positive value)

c)Labor rate variance = Actual labor cost - [AH*SR]

                         =145600 - [528 *250]

                         = 145600 - 132000

                        = 13600 U

d)

Date Account title Debit credit
Work in process inventory 140000
Labor rate variance 13600
Labor efficiency variance 8000
Wages payable 145600

ekkarill92 answered 2 years ago
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