Question

If the direct labor rate variance is $500 favorable, and the direct labor efficiency variance is $250 unfavorable, the journal entry will include a: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

check all that apply

• Debit to direct labor rate variance
• Credit to direct labor rate variance
• Debit to direct labor efficiency variance
• Credit to direct labor efficiency variance

Answer 1

In Direct labor if there is a variance in rate or efficiency if it is favourable it will be credited and if it is unfavourable it will be debited

So here direct labor rate variance is favourable so it will be be credited and labor efficiency variance is unfavourable which will be debited

So the correct answers are

• Credit to direct labor rate variance
• Debit to direct labor efficiency variance

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