Recording Standards in Accounts The Assembly Department produced 4,000 units of product during March. Each unit required 1.25 standard direct labor hours. There were 5,400 actual hours used in the Assembly Department during March at an actual rate of $13.5 per hour. The standard direct labor rate is $14.5 per hour. Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31. For a compound transaction, if an amount box does not require an entry, leave it blank. March 31 Work in Process Direct Labor Time Variance Direct Labor Rate Variance Wages Payable
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.
Recording Standards in Accounts
The Assembly Department produced 4,000 units of product during March. Each unit required 1.25 standard direct labor hours. There were 5,400 actual hours used in the Assembly Department during March at an actual rate of $13.5 per hour. The standard direct labor rate is $14.5 per hour.
Assuming direct labor for a month is paid on the fifth day of the following month, journalize the direct labor in the Assembly Department on March 31. For a compound transaction, if an amount box does not require an entry, leave it blank.
| March 31 | Work in Process | ||
| Direct Labor Time Variance | |||
| Direct Labor Rate Variance | |||
| Wages Payable |
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