Lewis Manufacturing uses a standard cost system. The direct labor cost standard is $18.00 per direct labor hour. The direct labor efficiency standard is 0.5 direct labor hour per unit. Actual direct labor for the month is 1,200 hours for a total cost of $24,000. Production for the month is 3,000 units.
Give the journal entry to record direct labor (not paid). Omit explanation.
Direct Labor Cost Variance:
(AC - SC) × AQ
($20 - $18) × (1,200) = $2,400 unfavorable
Direct Labor Efficiency Variance:
(AQ - SQ) × SC
(1,200 - 1,500) × $18 = $5,400 favorable
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