Direct Materials and Direct Labor Variances Berner Company produces a dark chocolate candy bar. Recently, the company adopted the following standards for one bar of the candy: Direct materials (8.30 oz. @ $0.09) $0.75 Direct labor (0.07 hr. @ $18.00) 1.26 Standard prime cost $2.01 During the first week of operation, the company experienced the following actual results: a. Bars produced: 143,000. b. Ounces of direct materials purchased: 1,187,200 ounces at $0.08 per ounce. c. There are no beginning or ending inventories of direct materials. d. Direct labor: 9,870 hours at $17.20. Required: Instructions for parts 1 and 2: If a variance is zero, enter "o" and select "Not applicable" from the drop down box. 1. Compute price and usage variances for direct materials. Materials Price Variance $1,203,80 x Favorable Materials Usage Variance 27 Unfavorable 2. Compute the rate variance and the efficiency variance for direct labor. Labor Rate Variance 8,008 X Favorable Labor Efficiency Variance 2,520 Favorable 3. Prepare the journal entries associated with direct materials and direct labor. If an amount box does not require an entry, leave it blank. Materials 108,342 x Direct Materials Price Variance 12,038 x Accounts Payable 96,304 x Record purchase of materials 108,315 x 27 > Work in Process Direct Materials Usage Variance Materials Record usage of materials > 108,342 182,700 x 182,700 x 8,008 X Work in Process Direct Labor Rate Variance Direct Labor Efficiency Variance Wages Payable Record labor variances > 2,520 172,172 x