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 $(8\mathrm{.}20$ oz$.$ @ $$0\mathrm{.}09)$ $$0\mathrm{.}74$

Direct labor $(0\mathrm{.}07$ hr$.$ @ $$18\mathrm{.}00)1\mathrm{.}26$

Standard prime cost $$2\mathrm{.}00$

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

Bars produced: $143,000.$

Ounces of direct materials purchased: $1,172,900$ ounces at $$0\mathrm{.}08$ per ounce.

There are no beginning or ending inventories of direct materials.

Direct labor: $9,870$ hours at $$17\mathrm{.}20.$

Required:

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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 $$\_\_\_$

Materials Usage Variance $$\_\_\_$

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

Labor Rate Variance $$\_\_\_$

Labor Efficiency Variance $$\_\_\_$

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

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Record purchase of materials

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Record usage of materials

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Record labor variances