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Larson Manufacturing uses a standard cost system. The direct labor cost standard is $18.00 direct labor hour. The direct labor efficiency standard is 0.5
Larson Manufacturing uses a standard cost system. The direct labor cost standard is $18.00 direct labor hour. The direct labor efficiency standard is 0.5 direct labor hour per unit. Actual direct labor for the month is 2,000 hours for a total cost of $42,000.00. Production for the month was 4,500 units. The journal entry to record direct labor incurred but not paid would be COA Work-in-Process Inventory Direct Labor Cost Variance 42,000 4,500 Direct Labor Efficiency Variance 6,000 Wages Payable 40,500 OB. Work-in-Process Inventory 40,500 Direct Labor Cost Variance 6,000 Direct Labor Efficiency Variance Wages Payable 4,500 42,000 OC Work-in-Process Inventory 4,500 Direct Labor Cost Variance 42.000 Direct Labor Efficiency Variance Wages Payable 40,500 6,000 OD. Work-in-Process Inventory 40,500 Direct Labor Cost Variance 6,000 Direct Labor Efficiency Variance Wages Payable 4,500 51,000
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