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 $(8\mathrm{.}2$ oz$.$ @ $$0\mathrm{.}09)$ $$0\mathrm{.}738$

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\mathrm{.}084$ per ounce.

c$.$ There are no beginning or ending inventories of direct materials.

d$.$ Direct labor: $5,510$ hours at $$18.$

Required:

Compute price and usage variances for direct materials.

Materials Price Variance &$,$ Favorable $vv$

Materials Usage Variance $,$ Unfavorable $$

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

Labor Rate Variance $$,$ No Change $vv$

Labor Efficiency Variance $$ Unfavorable $vv$

Feedoack

T Check My Work

$MPV=(AP-SP)AQ$

$LRV=(AR-SR)AH$;LEV$=(AH-SH)SR$;$SH=$actual production $x$ direct labor hours per unit

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 $"0".$

Materials $$

Direct Materials Price Variance $$

Accounts Payable $*$

Record usage of materials