Mangrum Corporation manufactures one product. It does not maintain any beginning or ending Work In Process Inventories. The company uses a standard cost system in which Inventories are recorded at their standard costs. Information concerning the direct labor standards for the company's only product is as follows: Standard Quantity or Hours 0.70 hours Inputs Direct labor Standard Price or Rate $21.50 per hour Standard Cost 15.05 During the year, the company assigned direct labor costs to work in process. The direct labor workers (who were paid In cash) worked 12,790 hours at an average cost of $19.50 per hour. The company calculated the following direct labor varlances for the year: Labor rate variance Labor efficiency variance $25,580 F $ 6,450 F Assume that all transactions are recorded on the below worksheet, which is similar to the worksheet shown in your text except that it has been divided into two parts so that it fits on one page. The beginning balances in each of the accounts have been given. PP&E (net) Stands for Property, Plant, and Equipment net of depreciation. Raw Work in Cash Materials Process 1/1 $1,130,000 $23,940 $0 Finished Goods $87,870 PP&E (net) = $526,400 = Materials Materials Price Quantity Variance Variance $0 $0 Labor Labor Rate Efficiency FOH Budget FOH Volume Retained Variance Variance Variance Variance Earnings $0 $0 $0 $0 $1,768,210 When the direct labor cost is recorded, which of the following entries will be made? Multiple Choice ($6.450) In the Labor Efficiency Varlance column $6.450 in the Labor Efficiency Varlance column ($6.450) In the Labor Rate Variance column $6.450 in the Labor Rate Variance column