Reference no: EM132608241

The Dexon Company makes and sells a single product, called a Mip, and employs a standard costing system. The following standards have been established for one unit of Mip:

                              Standard Quantity or Hours                 Standard Cost per Mip

Direct Materials         6 board metre                                      $9.00

Direct Labour             0.8 hours                                              $9.60

There were no inventories of any kind on August 1. During August, the following events occurred:

Purchased 15,000 board metres at the total cost of $24,000.

Used 12,000 board metres to produce 2,100 Mips.

Used 1,700 hours of direct labour time at a total cost of $20,060.

Problem 1: To record the incurrence of direct labour costs and its use in production, the general ledger would include what entry to the Labour Efficiency Variance account?

A) $480 credit.

B) $1,200 credit.

C) $1,200 debit.

D) $240 debit.