Stanfa Corporation's standard wage rate is $10.50 per direct labor-hour (DLH)and according to the standards,each unit of output requires 8.0 DLHs.In January,3,700 units were produced,the actual wage rate was $10.80 per DLH,and the actual hours were 25,280 DLHs.In the journal entry to record the incurrence of direct labor costs in January,the Work in Process entry would consist of a:
A)debit of $310,800.
B)credit of $273,024.
C)credit of $310,800.
D)debit of $273,024.

Question

Quizplus · Accepted Answer

The Work in Process account is debited with the standard cost of direct labor for the units produced. The standard cost is calculated as the standard wage rate ($10.50) multiplied by the standard hours (3,700 units * 8.0 DLHs/unit = 29,600 DLHs), which equals $310,800.

Stanfa Corporation's Standard Wage Rate Is $10