Exercise 11-14 The Hiroole Company uses a standard costing system. In August, 5,
ID: 2578182 • Letter: E
Question
Exercise 11-14 The Hiroole Company uses a standard costing system. In August, 5,810 actual labor hours were worked at a rate of $12.80 per hour. The standard number of hours is 5,640 and the standard wage rate is $13.60 per hour. Determine the Labor Rate and Variance Labor Efficiency Variance. (Enter all varlances as a positive number.) Labor Rate Variance Labor Efficiency Variance SHOW LIST OF ACCOUNTS LINK TO TEXT Record the related journal entry to record labor cost. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record labor cost)Explanation / Answer
Labour rate variance = (Standard rate - Actual rate) * Actual hours
= (13.6 - 12.8) * 5,810
= 4,648 Favourable.
Labour efficiency variance = (Standard hours - Actual hours) * Standard rate
= (5,640 - 5,810) * 13.6
= 2,312 Unfavourable.
---------------------------------------------------------------------------------------
Journal entry
Work in progress (5,810*12.8) 74,368 Wages payable 74,368Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.