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. @ $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 160,700 pounds of paper pulp at $0.28 per pound. Actual direct labor used was 73,000 hours at $18.20 per hour.

Required:

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

Question Content Area

1. Calculate the direct materials price and usage variances.

Materials Price Variance	$fill in the blank 30f7e0fbdfddfbc_1	FavorableUnfavorableNot applicable
Materials Usage Variance	$fill in the blank 30f7e0fbdfddfbc_3	FavorableUnfavorableNot applicable

2. Calculate the direct labor rate and efficiency variances.

Labor Rate Variance	$fill in the blank 30f7e0fbdfddfbc_5	FavorableUnfavorableNot applicable
Labor Efficiency Variance	$fill in the blank 30f7e0fbdfddfbc_7	FavorableUnfavorableNot applicable

Question Content Area

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.	Accounts PayableCashDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWages Payable	- Select -	- Select -
	Direct Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceFinished GoodsMaterialsWages PayableWork in Process	- Select -	- Select -
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage VarianceFinished GoodsMaterialsWages PayableWork in Process	- Select -	- Select -
2.	Accounts PayableCashDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceMaterialsWages PayableWork in Process	- Select -	- Select -
	Accounts PayableCashDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage VarianceMaterialsWages Payable	- Select -	- Select -
	Accounts PayableCashDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWages PayableWork in Process	- Select -	- Select -
3.	Accounts PayableCashFinished GoodsDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWork in Process	- Select -	- Select -
	Accounts PayableCashOverhead ControlDirect Labor Efficiency VarianceDirect Materials Price VarianceDirect Materials Usage VarianceMaterials	- Select -	- Select -
	Accounts PayableCashDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceFinished GoodsMaterials	- Select -	- Select -
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWages PayableWork in Process	- Select -	- Select -