DL variances; journal entries Information on Hanley's direct labor costs for January is as follows: Actual direct labor rate $7.50 Standard direct labor hours allowed 7,200 Actual direct labor hours 8,000 $4,400 Favorable Labor rate variance a. Compute the standard direct labor rate in January. $ 8.05 b. Compute the labor efficiency variance in January. Note: Do not use a negative sign with your answer. Labor efficiency variance $ 6,710 Unfavorable c. Prepare the journal entry to accrue direct labor cost and to record the labor variances for January. Note: Record any multiple debits or any multiple credits in alphabetical order by account name. Account Work in Process Inventory Labor Efficiency Variance Labor Rate Variance Wages Payable To record labor variances Debit Credit 64,400 0 6,710 0 0 4,400 0 60,000