Allan Company Manufactures Overalls -Refer to the Figure

Multiple Choice

Allan Company manufactures overalls. During the year, it manufactured 125,000 overalls, using 2.9 hours of direct labour at a rate of $6.25 per hour. The materials and labour standards for manufacturing the overalls are as follows:
Allan required 600,000 m at $1.95 per metre to make the 125,000 overalls.
$\begin{array}{lll}\text {Direct materials ( \( 5 \mathrm{~m} \) of denim \( (012 \) per metre) }&\$10\\\text { Direct labour (3 hours \( @ \$ 6 \) per hour) }&18\\\end{array}$

-Refer to the Figure.What is the entry to record the direct labour variances?

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