Direct Materials and Direct Labor Variances Bemer Company produces a dark chocolate candy bar. Recently, the company adopted the following standards for one bar of the candy: $0.738 Direct materials (8.2 oz. $0.09) Direct labor (0.07 hr. $18.00) 1.26 Standard prime cost $1.998 During the first week of operation, the company experienced the following actual results: a. Bars produced: 78,000. b. Ounces of direct materials purchased: 640,000 ounces at $0.084 per ounce. c. There are no beginning or ending inventories of direct materials. d. Direct labor: 5,510 hours at $18. Required: 1. Compute price and usage variances for direct materials. Materials Price Variance 3,840 Favorable Materials Usage Variance 36 Unfavorable 2. Compute the rate variance and the efficiency variance for direct labor. Labor Rate Variance 0 No Change Unfavorable Labor Efficiency Variance 900 Feedback Check My Work 1. MPV-(AP-SP)AQ 2. LRV=CAR-SRJAH LEV-(AH-SH)SR; SH-actual production x direct labor hours per unit 3. Prepare the lournal entries associated with direct materials and direct labor. If an amount box does not require an 3. Prepare the journal entries associated with direct materials and direct labor. If an amount box does not require an entry, leave it blank. If an amount is zero, enter "o". Record purchase of materials Materials 57,600 Direct Materials Price Variance 3,840 Accounts Payable 61.440 X Record usage of materials 57.564 36 Work in Process Direct Materials Usage Variance Materials Record labor variances 57,600 100,080 X 0 Work in Process Direct Labor Rate Variance Direct Labor Efficiency Variance Wages Payable 900 X 99,180