Direct Labor and Direct Materials Variances, Journal Entries Samson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels: Paper pulp (4 lbs. O $0.30) $ 1.20 Labor (1.8 hrs. $18) 32.40 Total prime cost $33.60 During the first quarter of the year, Samson produced 40,000 cases of paper towels. The company purchased and used 160,300 pounds of paper pulp at $0.27 per pound. Actual direct labor used was 80,000 hours at $18.20 per hour Required: Instructions for parts 1 and 2: If a variance is zero, enter "o" and select "Not applicable" from the drop down box. 1. Calculate the direct materials price and usage variances. Materials Price Variance 4,809 Favorable Materials Usage Variance 90 Unfavorable 2. Calculate the direct labor rate and efficiency variances. Labor Rate Variance -16,000 Unfavorable Labor Efficiency Variance 144,000 Unfavorable 3. Prepare the journal entries for (1) the direct materials price variance, (2) the direct materials usage variance, and (3) the direct labor variances. If an amount box does not require an entry, leave it blank. 1. Materials 4,809 X Direct Materials Price Variance 4,809 Accounts Payable 2. Work in Process Direct Materials Usage Variance 90 > Materials 3. Work in Process Direct Labor Efficiency Variance Direct Labor Rate Variance 16,000 Wages Payable 144,000 X