7-20 Journal Entries for Direct Labor The AB Company had a standard rate (price) of $8.00 per direct-labor hour. Actual hours in July were 20,526 at an actual price of $7.90 per hour. The standard direct-labor hours allowed for the out- put achieved were 20,000. Prepare general-journal entries that isolate price and efficiency variances. Pre- pare one entry whereby Work in Process is carried at standard hours allowed times standard prices. Then prepare a second set of entries whereby

(a) price variances are isolated as labor costs are originally journalized and

(b) effi- ciency variances are isolated as units are transferred from Work in Process to Finished Goods.