(Appendix) Record direct labor purchase and use (Learning Objective 6)

During the week, McDonald’s french fry manufacturing facility incurred 2,000 hours of direct labor. Direct laborers were paid $12.25 per hour. The standard hourly labor rate is $12. Standards indicate that for the volume of output actually achieved, the factory should have used 2,100 hours. Record the following transac¬ tions using a standard cost accounting system:

1. The accumulation of labor costs 2. The assignment of direct labor to production Are the variances favorable, or unfavorable? Explain.