Direct Materials and Direct Labor Variances Zoller Company produces a dark chocolate candy bar. Recently, the company adopted the following standards for one bar of the candy: Direct materials (6.30 oz. @ $0.20) $1.26 Direct labor (0.08 hr. @ $18.00) 1.44 Standard prime cost $2.70 During the first week of operation, the company experienced the following actual results: a. Bars produced: 142,000. b. Ounces of direct materials purchased: 894,900 ounces at $0.21 per ounce. C. There are no beginning or ending inventories of direct materials. d. Direct labor: 11,220 hours at $17.30. Required: 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 8,949 Unfavorable Materials Usage Variance 60 Unfavorable 2. Compute the rate variance and the efficiency variance for direct labor. Labor Rate Variance 7,854 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 or enter "O". Materials 178,980 Direct Materials Price Variance 8,949 Accounts Payable 187,929 Record purchase of materials Work in Process 178,920 Direct Materials Usage Variance 60 Materials 178,980 Record usage of materials Work in Process 204,480 Direct Labor Rate Variance 194,106 X Direct Labor Efficiency Variance 11,496 x Wages Payable 2,520 Record labor variances