Manufacturing
Direct Labor Rate Variance
Recording the difference between actual wages paid and standard labor rates.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Work-in-Process (at Standard) | Asset (+) | 2,000.00 | - |
| Labor Rate Variance (Favorable) | Gain (-) | - | 100.00 |
| Wages Payable (Actual) | Liability (+) | - | 1,900.00 |
💡 Accountant's Note
If we used cheaper, less-skilled labor than the budget planned, we record a 'Favorable' rate variance.
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