Riquisimo Company produces a popular candy bSr called cocolate. The candy is produced in Guatemala and exported to the United States. Recently the company adopted the fol¬

lowing standards for one 5 ounce bar of the candy:

During the first week of operation, the company experienced the following actual results;

a. Bars produced: 50,000. _

b. Ounces of materials purchased: 285,000 ounces at $0,045.

c. There are no beginning inventories of raw mateipls

d. Direct labor: 2,600 hours at $2.55. Required:
1. Compute price and usage variances for direct materials.
2. Compute the rate variance and the efficiency variance for direct labor.
3. Prepare the journal entries associated with materials and- labor.

Transcribed Image Text:

Direct materials (5.5 oz. @ $0.04) $0.22 Direct labor (0.05 hr. $2.60) 0.13 Standard prime cost $0.35