Haliburton Mills Inc. is a large producer of men's and women's clothing. The company uses standard costs for all of its products. The standard costs and actual costs for a recent period are given below for one of the company's product lines (per unit of product): Direct materials: Standard: 2.0 metres at $4.20 per metre Actual: 2.2 metres at $3.95 per metre Direct labour: Standard: 2.2 hours at $3.00 per hour Actual: 1.8 hours at $3.35 per hour Variable manufacturing overhead: Standard: 2.2 hours at $1.50 per hour Actual: 1.8 hours at $1.85 per hour Fixed manufacturing overhead: Standard: 2.2 hours at $3.60 per hour Actual: 1.8 hours at $3.65 per hour Total cost per unit Actual costs: 9,500 units at $24.62 Standard costs: 9,500 units at $26.22 Difference in cost-favourable $233,890 249,090 $ 15,200 Standard Cost Actual Cost $ 8.40 $ 8.69 6.60 6.03 3.30 3.33 7.92 6.57 $ 26.22 $ 24.62 During this period, the company produced 9,500 units of product. A comparison of standard and actual costs for the period on a total cost basis is also given above. There was no inventory of materials on hand to start the period. During the period, 20,900 metres of materials was purchased and used in production. The denominator level of activity for the period was 17,540 hours. Labour rate variance Labour efficiency variance $ U 12,096 F b. Prepare a journal entry to record the incurrence of direct labour cost for the period. (List debit entries first). View transaction list View journal entry worksheet No Event General Journal 1 1 Work in process Labour rate variance Labour efficiency variance Wages payable Debit Credit 62,700 5,985 7,980 57,285 2. For direct labour: a. Compute the rate and efficiency variances. (Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variance F b. Prepare a journal entry to record the incurrence of direct labour cost for the period. (List debit entries first). View transaction list View journal entry worksheet No Event General Journal 1 1 Work in process Labour rate variance Labour efficiency variance Wages payable Debit Credit 62,700 5,985 7,980 57,285