Exercise 17-18 (Static) Prorating Direct Labor Cost Variances (LO 17-1) Cook Company processes and packages frozen seafood. The year just ended was Cook's first year of business and they are preparing financial statements. The immediate Issue facing Cook is the treatment of the direct labor costs. Cook set a standard at the beginning of the year that allowed two hours of direct labor for each unit of output. The standard rate for direct labor is $27 per hour. During the year, Cook processed 60,000 units of seafood for the year, of which 4,800 units are in ending finished goods. (There are no work-in-process inventories). Cook used 123,500 hours of labor. Total direct labor costs paid by Cook for the year amounted to $3,087,500 Required: 6. & b. What was the direct labor price variance and the direct labor efficiency variance for the year? c. Assume Cook writes off all variances to Cost of Goods Sold. Prepare the entries Cook would make to record and close out the variances. d. Assume Cook prorates all variances to the appropriate accounts. Prepare the entries Cook would make to record and close out the variances. ces Complete this question by entering your answers in the tabs below. Reg A and B Req C Reg D what was the direct labor price variance and the direct labor efficiency variance for the year? (Indicate the effect of eac variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option) Died labor price variance Direct labor eficiency valance Rog and Reqc > ME GE 1 of 8 Noxd> 9 Type to search