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)$1.26Direct labor (0.08 hr. @ $18.00)1.44Standard prime cost$2.70

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

1. Bars produced: 142,000.
2. Ounces of direct materials purchased: 894,900 ounces at $0.21 per ounce.
3. There are no beginning or ending inventories of direct materials.
4. 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$ $xxxx Unfavorable

Materials Usage Variance$ $xxxx Unfavorable

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

Labor Rate Variance$ XXXXX Favorable

Labor Efficiency Variance$ XXXX Favorable

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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".

Materialsxxxx

Direct Materials Price Variancexxxx

Accounts Payablexxxx

Record purchase of materials

Work in Process xxxx

Direct Materials Usage Variancexxx

Materials xxx

Record usage of materials

Work in Process xxxx

Direct Labor Rate Variance xxxx

Direct Labor Efficiency Variancexxxx

Wages Payable xxxx