Question 34

(Appendix 10B) Which of the following entries would correctly record the charging of direct labour costs to Work in Process given an unfavourable labour efficiency variance and a favourable labour rate variance?

Question 34 options:

A)

Debits to Work in Process and Labour Rate Variance, and credits to Labour Efficiency Variance and Wages Payable.

B)

A debit to Work in Process, and credits to Labour Efficiency Variance, Labour Rate Variance, and Wages Payable.

C)

A debit to Work in Process and an equal credit to Wages Payable.

D)

Debits to Work in Process and Labour Efficiency Variance, and credits to Labour Rate Variance and Wages Payable.