Chips Co Assigned Direct Labor Cost to Its Products in May

question 143

Essay

Chips Co. assigned direct labor cost to its products in May for 1,300 standard hours of direct labor at the standard $8 per hour rate. The direct labor rate variance for the month was $200 favorable and the direct labor efficiency variance was $150 favorable. Prepare the journal entry to charge Goods in Process Inventory for the standard labor cost of the goods manufactured in May and to record the direct labor variances. Assuming that the direct labor variances are immaterial, prepare the journal entry that Chips would make to close the variance accounts.

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Statistical measures that indicate the extent to which two or more variables fluctuate together.

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A connection between two events where one is understood to be a direct result of the other.

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