Tulip Inc. uses standard costing, and its manufacturing standards are as follows: 2 pounds of materials at $13 per pound, and 3 hours of labor at $10 per hour. Budgeted production last period was 5,000 units, and actual production and sales was 4,800 units. Last period, Tulip purchased and used 9,800 pounds of materials for $135,000, and used 15,000 labor hours, costing $145,000. What is the journal entry to record direct labor costs to the Cost of Goods Sold account?
A.
| Cost of Goods Sold | $ | 144,000 | ||
| Wages Payable | $ | 144,000 |
B.
| Cost of Goods Sold | $ | 144,000 | ||
| Direct Labor Rate Variance | $ | 6,000 | ||
| Direct Labor Efficiency Variance | $ | 5,000 | ||
| Wages Payable | $ | 145,000 |
C.
| Cost of Goods Sold | $ | 145,000 | ||
| Wages Payable | $ | 145,000 |
D.
| Cost of Goods Sold | $ | 144,000 | ||
| Direct Labor Efficiency Variance | $ | 6,000 | ||
| Direct Labor Rate Variance | $ | 5,000 | ||
| Wages Payable | $ | 145,000 |
Answer: D
Business
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