Direct Materials and Direct Labor Variances

Dulce Company produces a popular candy bar called Rico. Thecandy is produced in Costa Rica and exported to the United States.Recently, the company adopted the following standards for one5-ounce bar of the candy:

Direct materials (5.5 oz. @ $0.04)	$0.22
Direct labor (0.05 hr. @ $2.60)	0.13
Standard prime cost	$0.35

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

1. Bars produced: 100,000.
2. Ounces of direct materials purchased: 570,000 ounces at$0.045.
3. There are no beginning or ending inventories of directmaterials.
4. Direct labor: 5,200 hours at $2.55.

You may use the attached spreadsheet to solve this activity. Youwill find the spreadsheet by clicking on the paper clip found inthe upper left hand corner of the screen.

Required:

1.Compute price and usage variances for direct materials. Entervariance as a positive number and select Favorable orUnfavorable. Price Variance $ -Select- F U ( U or F ) Usage Variance $ -Select- F U (U or F)

2. Compute the rate variance and the efficiency variance for directlabor. Enter variance as a positive number and select Favorable orUnfavorable. Rate Variance $ -Select- F U ( U or F ) Efficiency Variance $ -Select- F U ( U or F)