Berner Company produces a dark chocolate candy bar. Recently, the company adopted the following standards for one bar of the candy:

Direct materials (8.20 oz. @ $0.09)	$0.74
Direct labor (0.07 hr. @ $18.00)	1.26
Standard prime cost	$2.00

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

Bars produced: 142,000.

Ounces of direct materials purchased: 1,164,700 ounces at $0.08 per ounce.

There are no beginning or ending inventories of direct materials.

Direct labor: 9,800 hours at $17.30.

Required:

Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.

1. Compute price and usage variances for direct materials.

Materials Price Variance	$________	Favorable Unfavorable Not applicable
Materials Usage Variance	$______	Favorable Unfavorable Not applicable

2. Compute the rate variance and the efficiency variance for direct labor.

Labor Rate Variance	$_____	Favorable Unfavorable Not applicable
Labor Efficiency Variance	$_____	Favorable Unfavorable Not applicable

3. Prepare the journal entries associated with direct materials and direct labor. If an amount box does not require an entry, leave it blank.

blank	Materials	___	_____
	Direct Materials Price Variance	_____	_____
	Accounts Payable	____	_____
	Record purchase of materials
blank	Work in Process	____	____
	Direct Materials Usage Variance	____	_____
	Materials	____	____
	Record usage of materials
blank	Work in Process	____	_____
	Direct Labor Rate Variance	____	_____
	Direct Labor Efficiency Variance	____	____
	Wages Payable	____	____
	Record labor variances