Allan Company
Allan Company Manufactures Overalls The Company Required 600,000 M at $1

Multiple Choice

Allan Company
Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour per unit at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows: $\begin{array}{lll}\text {Direct materials ( \( 5 \mathrm{~m} \) of denim \( @ \$ 2 \) per metre) }&\$10\\\text {Direct labour (3 hours \( @ \$ 6 \) per }&18\\\end{array}$
The company required 600,000 m at $1.95 per metre to make the 125,000 overalls.There were no beginning or ending inventories.
-Refer to Allan Company. What is the entry to record the direct labour variances?

A) Work in Process 2,265,625
Labour Efficiency Variance 75,000
Labour Rate Variance 90,625
Accrued Payroll 2,250,000
B) Work in Process 2,250,000
Labour Rate Variance 90,625
Labour Efficiency Variance 75,000
Accrued Payroll 2,265,625
C) Work in Process 2,250,000
Labour Rate Variance 93,750
Labour Efficiency Variance 78,125
Accrued Payroll 2,265,625
D) Work in Process 2,265,625
Labour Efficiency Variance 78,125
Labour Rate Variance 93,750
Accrued Payroll 2,250,000