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s10-17 - Student Mukhtar Lakha Course Acct2302-7502-Robert...

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Unformatted text preview: Student: Mukhtar Lakha Course: Acct2302-7502-Robert Nicholson-Fall 201 1 Instructor: Robert Nicholson Book: Braun: Managerial Accounting, 26 Date: 11/20/11 Time: 8:12 PM S 10-17 (similar to) During the week, Carver's french fry manufacturing facility incurred 1,900 hours of direct labor. Direct laborers were paid $12.35 per hour. The standard hourly labor rate is $12.10. Standards indicate that for the volume of output actually achieved, the factory should have used 2,000 hours. Record the following transactions using a standard cost accounting system: 1. The accumulation of labor costs 2. The assignment of direct labor to production Are the variances favorable or unfavorable? Explain. 1. Let's record the journal entry for the accumulation of labor costs. (Record debits first, then credits. Explanations are not required.) Journal Entry Date Credit Manufacturing Wages Direct Labor Price Variance Wages Payable 23,465 V 2. Let's record the journal entry for the assignment of direct labor to production. Journal Entry Date Credit Work in Process Inventory Direct Labor Efficiency Variance 1,210 V Manufacturing Wages 22,990 V Are the variances favorable or unfavorable? Explain. The price variance is unfavorable‘. We can tell this in two ways: 1) Carver's had to pay more‘ per hour than the standard rate and 2) the variance account is debited The efficiency variance is favorable . We can tell this in two ways: 1) Workers spent fewer hours than the standard number of hours allowed for the actual production level and 2) the variance account is credited . Journal Entry Date Credit Direct Labor Efficiency Variance nothing nothi nothing nothing nothi nothing nothing nothi nothing nothing nothi YOU ANSWERED: Page 1 Student: Mukhtar Lakha Course: Acct2302-7502-Robert Nicholson-Fall 2011 Instructor: Robert Nicholson Book: Braun: Managerial Accounting, 26 Date: 11/20/11 Time: 8:12 PM S 1 0- 1 7 (similar to) (cont) favorable less Page 2 ...
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