Question

Journalize the following transactions for Shelton, Inc (a) Incurred direct labor costs of $23,200 for 3,410 hours. The standard labor cost was $24,041. (b) Assigned 3,410 direct labor hours costing $23,200 to production. Standard hours were 3,580. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 125.) No. Account Titles and Explanation Debit Credit (a) (b)

Answer 1

The transactions for Shelton, Inc involve journalizing the direct labor costs incurred and accounting for the labor variance between actual and standard costs. No additional entry is needed for assigning the labor hours to production.

Step-by-step explanation:

The question pertains to journalizing direct labor costs for Shelton, Inc, as presented in two parts, (a) and (b). It involves analyzing the incurred direct labor costs and the standard labor costs for the number of hours worked to perform the task, and how these hours are assigned to production, considering both actual and standard hours.

Journal Entry for part (a):

Work in Process (Debit): $23,200

Labor Variance (Debit/Credit): Amount to reconcile with standard cost ($24,041 - $23,200)

Wages Payable (Credit): $23,200

If the actual cost is lower than the standard, the variance is credited; if higher, it is debited.

Journal Entry for part (b):

There is no additional journal entry needed for part (b) since the costs have already been assigned to production in part (a).

Answer 2

Answer and Explanation :

As per the data given in the question,

The journal entries are shown below:

a)

Factory labor A/c Dr. $24,041

To Labor rate variance Cr. $841 ($24,041 - $23,200)

To Wages payable Cr. $23,200

(Being factor payroll is recorded)

b) Work in process inventory A/c Dr $25,240 (3,580 × $24,041 ÷ 3,410)

To Labor efficiency variance Cr. $1,199 ($25,240 - $24,041)

To Factory labor $24,041

(Being assigning of payroll to work in process inventory is recorded))