Instructions: Setup for the discussion Please create a thread using your first and last name, and respond to the following: 1. Read pages 304-306 of your textbook - P6: Standard Cost Accounting System 2. Explain how standard costs and variances are recorded in the accounts of a business 3. Using the information about the Wilson Company from the Chapter 8 lecture notes, record the standard DM, DL and overhead costs and variances in journal entries Direct Labor Variances Direct Labor Rate and Efficiency Variances - Example 1 Wilson Productions manufactured and sold 1,000 products at $11.000 each during the past year. At the beginning of the year, production had been set at 1.200 products, At the beginning of last year, Wilson Productions set direct labor standards of 20 hours at $15 per hour for each product produced. During the year 20.500 direct labor hours were actually worked at an average cost of $16 per hour. Calculate the company's direct labor rate and efficiency variances for the year. Total Cost Variance Total Standard Cost: $15 x 20 hours x 1.000 products = $300,000 Total Actual Cost: $16 x 20,500 hours - $328,000 Total Cost Variance: $28,000 Unfavorable - we spent more than we expected. Rate Variance (Standard Price - Actual Price) X Actual Quantity (8.5 X 901 ($15 - $16) X 20,500 hours - $20,500 Unfavorable. we spent more per hour than expected Efficiency Variance (Standard Quantity - Actual Quantity) Standard Price 120,000 - 20.500) x $15 - $7,500 Unfavorable - we used more hours than expected Reconciliation Rate variance of $20,500 U plus Efficiency variance of $7.500 U explains total cost variance of $28,000 U TRRRRRR