Question

Journalize the following transactions for Shelton, Inc. (a) Incurred direct labor costs of $23,040 for 3,200...

Journalize the following transactions for Shelton, Inc.

(a) Incurred direct labor costs of $23,040 for 3,200 hours. The standard labor cost was $24,160.
(b) Assigned 3,200 direct labor hours costing $23,040 to production. Standard hours were 3,380.

(Credit account titles are automatically indented when amount is entered. Do not indent manually. Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)
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Answer #1

Standard hours. = 3200

Standard value. = $ 24,160

Standard rate. = $ 24,160/3200. = $ 7.55 per hour

Actual hours. = 3200

Actual value. = $ 23,040

Actual rate. = $ 7.2 Per hour

Direct labour price variance. = (7.55-7.2)*3200. = $1,120 F

Direct labour efficiency variable. = (3,380-3,200)*7.2

= 1,296 F

  • Journal entries:
a). Work in process inventory $24,160
Direct labour rate variance $1,120
Direct labour payable $23,040
b). Work in process inventory(3,380*7.2) $24,336
Direct labour efficiency variance $1,296
Direct labour payable $23,040
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