question 13. pinkney corporation has provided the following data concerning its direct labor costs for…

Explanation:

Step1: Calculate Actual Direct Labor Cost

Actual direct labor cost = Actual wage rate × Actual hours = $11.20 × 39,720 = $444,864

Step2: Calculate Standard Direct Labor Cost

Standard hours for actual output = Actual output × Standard hours per unit = 7,900 × 5.3 = 41,870 DLHs Standard direct labor cost = Standard wage rate × Standard hours for actual output = $12.20 × 41,870 = $510,814

Step3: Determine Labor Rate Variance and Labor Efficiency Variance (though not needed for journal entry, but to understand the accounts)

Labor rate variance = (Actual wage rate - Standard wage rate) × Actual hours = ($11.20 - $12.20) × 39,720 = -$39,720 (favorable) Labor efficiency variance = (Actual hours - Standard hours for actual output) × Standard wage rate = (39,720 - 41,870) × $12.20 = -$26,230 (favorable)

Step4: Journal Entry

To record the incurrence of direct labor costs, we debit Work in Process (for standard cost), debit Labor Rate Variance (if unfavorable, but here it's favorable so credit) and Labor Efficiency Variance (if unfavorable, but here it's favorable so credit), and credit Wages Payable (for actual cost). Wait, actually, the correct journal entry for direct labor is: Debit Work in Process (standard cost) $510,814 Credit Wages Payable (actual cost) $444,864 Credit Labor Rate Variance $39,720 Credit Labor Efficiency Variance $26,230

Wait, let's recheck. The actual cost is paid (or payable) at actual rate, so Wages Payable is actual hours × actual rate = 39,720 × 11.20 = $444,864. Work in Process is debited for the standard cost of actual production, which is standard hours per unit × actual units × standard rate = 5.3 × 7,900 × 12.20. Let's calculate that again: 7,900 × 5.3 = 41,870; 41,870 × 12.20 = 41,870 × 12 + 41,870 × 0.20 = 502,440 + 8,374 = $510,814. Then the difference between Work in Process and Wages Payable is the total labor variance, which is split into rate and efficiency. The total variance is 510,814 - 444,864 = $65,950, which is the sum of rate variance ($39,720) and efficiency variance ($26,230) (39,720 + 26,230 = 65,950). So the journal entry is:

Debit Work in Process $510,814 Credit Wages Payable $444,864 Credit Labor Rate Variance $39,720 Credit Labor Efficiency Variance $26,230

This is because the favorable variances are credited (since they are savings).

Answer:

Debit Work in Process $510,814
Credit Wages Payable $444,864
Credit Labor Rate Variance $39,720
Credit Labor Efficiency Variance $26,230

(To record the incurrence of direct labor costs for November)