If an analysis shows an unfavorable labor rate variance of $18,000 and a favorable labor efficiency variance of $10,000,the entry to record the cost of direct labor and related variances would include:
A)a debit to Labor Rate Variance for $18,000.
B)a credit to Work in Process inventory for $18,000.
C)a debit to Labor Efficiency Variance for $10,000.
D)a debit to Cost of Goods Sold for $10,000.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

An unfavorable labor rate variance means that the actual labor rate was higher than expected, leading to an additional cost. This is recorded as a debit to Labor Rate Variance for $18,000, reflecting the increased expense.

If an Analysis Shows an Unfavorable Labor Rate Variance of $18,000