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

oz$.$ @ $$0\mathrm{.}20$

$$1\mathrm{.}26$

Direct labor $.$

@ $$18\mathrm{.}00$

Standard prime cost

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

a$.$ Bars produced: $145,000.$

b$.$ Ounces of direct materials purchased: $913,800$ ounces at $$0\mathrm{.}21$ per ounce.

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

d$.$ Direct labor: $11,460$ hours at $$17\mathrm{.}30.$

Required:

Instructions for parts $1$ and $2$: If a variance is zero, enter $"0"$ and select "Not applicable" from the drop down box.

Compute price and usage variances for direct materials.

Materials Price Variance $

Materials Usage

Variance

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

Labor Rate Variance $

Labor Efficiency

Variance

$

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 $"0".$

Record purchase of materials

Record usage of materials