REQUIREMENT:

TAGLISH EXPLNATION THIS TOPIC FOR MY REPORT

B. Direct Labor Standard Costs and Operating Performance Measures 321 The following abbreviations/terms will be used in this illustration. Actual Labor Hours - AH Standard Labor Hours - SH Actual Labor Rate - ALr Standard Labor Rate - SR 1. Payment and Application of Direct Labor to Production Journal Entry: Work in Process Inventory (SH x SLr) Labor Efficiency Variance* (AH - SH) x Sir XXX Labor Price/Rate Variance* * (ALr - SLr) x AH XXX Accrued Payroll Accounts (AH x ALr) XXX XXX AH assumed to exceed SH, thus, resulting to an Unfavorable Efficiency Variance. ** SLr assumed to exceed ALr, thus, resulting to a Favorable Price/Rate Variance. C. Variable Factory Overhead The following abbreviations/terms will be used in this illustration. Standard Variable Overhead Rate - SVOr Budgeted Overhead - BOH 1. Payment/Incurrence of Variable Factory Overhead Journal Entry: Variable Overhead (Actual) XXX Various Accounts (e.g., accounts payable, XXX prepaid supplies, etc.) 2. Application of Variable Overhead to Production Journal Entry: XXX Work in Process Inventory (SH x SVOr) XXX Variable Overhead Applied (SH xSVOr)