When a Journal Entry Is Made in a Standard Cost

question 143

Multiple Choice

When a journal entry is made in a standard cost system to record the liability for direct manufacturing labour costs, the difference between the debit to the work-in-process control account and the credit to the payroll payables is

• A)only the efficiency variance.
• B)only the rate variance.
• C)the difference between the actual wage rate and the budgeted rate, times the actual hours.
• D)the difference between the actual wage rate and the budgeted rate, times the budget hours.
• E)the total of the price and efficiency labour variances.

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Definitions:

Product L3

Denotes another distinct product or model within a company's merchandise or production lineup, serving as a specific reference to differentiate it from other items.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the amount of activities they use.

Activity-Based Costing

An accounting method that identifies the activities that a firm performs and then assigns indirect costs to products based on the benefit received from those activities.

Activity-Based Costing

A method of cost accounting that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.