When Direct Labor Costs Are Incurred in the Mixing Department

question 125

Multiple Choice

When direct labor costs are incurred in the Mixing Department, the journal entry to record the transaction includes a

• A)debit to Wages Payable.
• B)credit to Manufacturing Overhead.
• C)credit to Work in Process, Mixing Department.
• D)debit to Work in Process, Mixing Department.

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Definitions:

Materials Quantity Variance

The variance arising from the actual amount of materials utilized in manufacturing compared to the anticipated standard quantity, times the standard expense for each unit.

Labor Efficiency Variance

The variance between the number of hours actually worked and the anticipated standard hours, times the normal rate per hour.

Labor Rate Variance

A metric used to measure the difference between the actual rate paid to workers and the expected (or standard) rate.

Direct Labor

The labor cost attributed directly to the production of goods or services.