Calista & Lane, CPAs, set the following standard for its inventory audit of Triumph Co.: 560 hours at an average hourly rate of $250. The firm actually worked 528 hours during the inventory audit process. The total labor variance for the audit was $5,600 unfavorable. d. Prepare the entry to assign labor costs to inventory, record the labor variances, and accrue payroll costs. Account Debit Credit To record labor variances Previous answers for assistance: a. Compute the total actual payroll. $145,600 b. Compute the labor efficiency variance. $8,000 Favorable c. Compute the labor rate variance. $13,600 Unfavorable
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Calista & Lane, CPAs, set the following standard for its inventory audit of Triumph Co.: 560 hours at an average hourly rate of $250. The firm actually worked 528 hours during the inventory
d. Prepare the entry to assign labor costs to inventory, record the labor variances, and accrue payroll costs.
| Account | Debit | Credit |
| To record labor variances |
Previous answers for assistance:
a. Compute the total actual payroll. $145,600
b. Compute the labor efficiency variance. $8,000 Favorable
c. Compute the labor rate variance. $13,600 Unfavorable
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