Escuchar Products, a producer of DVD players, has established a labor standard for its productdirect labor: 2 hrs at $9.75 per hour. During January, Escuchar produced 12,300 DVD players. The actual direct labor used was 24,040 hours at a total cost of $237,996.

	Required:
1.	Compute the labor rate and efficiency variances.
2.	Prepare journal entries on Jan. 31 for all activities relating to labor.

Chart of Accounts

CHART OF ACCOUNTS

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Supplies
132	Prepaid Insurance
141	Materials
142	Work in Process
143	Overhead Control
144	Finished Goods
170	Land
180	Equipment
181	Accumulated Depreciation

	LIABILITIES
210	Accounts Payable
220	Accrued Payroll
230	Utilities Payable
240	Lease Payable
	EQUITY
310	Common Stock
320	Retained Earnings

	REVENUE
410	Sales
	EXPENSES
510	Cost of Goods Sold
511	Materials Price Variance
512	Materials Usage Variance
513	Labor Efficiency Variance
514	Labor Rate Variance
520	Insurance Expense
530	Wages Expense
540	Supplies Expense
550	Utilities Expense
560	Depreciation Expense
590	Miscellaneous Expense

Labor Variances

1. Compute the labor rate and efficiency variances.

Labor rate variance	$
Labor efficiency variance	$

Journal

2. Prepare journal entries on Jan. 31 for all activities relating to labor. Refer to the Chart of Accounts for the exact wording of account titles.

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GENERAL JOURNAL

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT
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2
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