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 (6.20 oz. @ $0.20)$1.24Direct labor (0.08 hr. @ $18.00)1.44Standard prime cost$2.68

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

1. Bars produced: 145,000.
2. Ounces of direct materials purchased: 899,300 ounces at $0.21 per ounce.
3. There are no beginning or ending inventories of direct materials.
4. Direct labor: 11,460 hours at $17.20.

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$fill in the blank 8ea1f7f78fea07b_1 Materials Usage Variance$fill in the blank 8ea1f7f78fea07b_3

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

Labor Rate Variance$fill in the blank 8ea1f7f78fea07b_5 Labor Efficiency Variance$fill in the blank 8ea1f7f78fea07b_7

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1. SP = Standard price per unit AQ =Actual quantity of direct material used in production SQ = Standard quantity of input for actual quantity of output If necessary, refer to the textbook for the materials price variance and usage variance formulas.

2. AR = Actual hourly wage rate SR = Standard hourly wage rate AH =Actual direct labor hours used SH = Standard direct labor hours that should have been used If necessary, refer to the textbook for the labor rate variance and efficiency variance formulas.

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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 or enter "0".

blank - Select -- Select - - Select -- Select - - Select -- Select - Record purchase of materials blank - Select -- Select - - Select -- Select - - Select -- Select - Record usage of materials blank - Select -- Select - - Select -- Select - - Select -- Select - - Select -- Select - Record labor variances