Question

Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials...

Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows:

Materials:

​

Standard

Actual

Standard:

200 pounds at $3.00 per pound

$600

​

Actual:

220 pounds at $2.85 per pound

​

$627

​

​

​

​

Direct labor:

​

​

​

Standard:

400 hours at $15.00 per hour

6,000

​

Actual:

368 hours at $16.50 per hour

​

6,072

​

What is the journal entry to record labor variances?

Select one:

a. Work in Process 6,072

                       Payroll 6,072

b. Payroll 6,072

      Work in Process 6,072

c. Work in Process                 6,000

Labor Rate Variance             552

               Labor Efficiency Variance   480

               Payroll                              6,072

d. Work in Process                           6,000

Labor Efficiency Variance               552

                                  Labor Rate Variance 480

                                  Payroll                      6,072

Bodacious Corporation produced 100 units of Product AA. The total standard and actual costs for materials and direct labor for the 100 units of Product AA are as follows:

Materials:

​

Standard

Actual

Standard:

200 pounds at $3.00 per pound

$600

​

Actual:

220 pounds at $2.85 per pound

​

$627

​

​

​

​

Direct labor:

​

​

​

Standard:

400 hours at $15.00 per hour

$6,000

​

Actual:

368 hours at $16.50 per hour

​

$6,072

​

What is the labor efficiency variance for Bodacious Corporation?

Select one:

a. $480 (U)

b. $480 (F)

c. $552 (U)

d. $552 (F)

Business   Accounting   
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Homework Answers

Answer #1
1
Labor Rate Variance = 368*(16.50-15)= $552 U
Labor Efficiency Variance = 15*(368-400)= $480 F
The journal entry to record labor variances is:
Work in Process 6000
Labor Rate Variance 552
         Labor Efficiency Variance 480
         Payroll 6072
Option C is correct
2
Labor Efficiency Variance = 15*(368-400)= $480 F
Option B $480 (F) is correct
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