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Calculating direct labor costs from standard wage rate

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Santiesteban Corporation's standard wage rate is $16 per direct labor-hour (DLH) and according to the standards, each unit of output requires 7.6 DLHs. In March, 9,000 units were produced, the actual wage rate was $12.7 per DLH, and the actual hours were 65,700 DLHs.

In the journal entry to record the incurrence of direct labor costs in March, the Work in Process entry would consist of a:

credit of $1,084,400.

debit of $1,094,400.

debit of $1,084,400.

credit of $1,094,400.

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The expert calculates the direct labor costs from standard wage rates.

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Santiesteban Corporation's standard wage rate is $16 per direct labor-hour (DLH) and according to the standards, each unit of output ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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