Which of the following entries would correctly record the charging of direct labour costs to work in process given an unfavourable labour efficiency variance and a favourable labour rate variance?
A) Work in process Labour efficiency variance Labour rate variance Wages payable
B) Work in process Wages payable
C) Work in process Labour efficiency variance Labour rate variance Wages payable.
D) Work in process Labour rate variance Labour efficiency variance Wages payable.

Question

Quizplus · Accepted Answer

When there is an unfavourable labour efficiency variance, it means that more labour hours were used than expected to complete the work. This results in a debit to the Labour efficiency variance account. When there is a favourable labour rate variance, it means that the actual labour rate paid was lower than the expected labour rate. This results in a credit to the Labour rate variance account. To record the charging of direct labour costs to work in process, the following entry would be made:Work in process Labour efficiency variance Labour rate variance Wages payable

Which of the Following Entries Would Correctly Record the Charging