Direct Materials and Direct Labor Variances Zoller Company produces a dark chocolate candy bar. Recently, the company
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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:
- Bars produced: 142,000.
- Ounces of direct materials purchased: 894,900 ounces at $0.21 per ounce.
- There are no beginning or ending inventories of direct materials.
- Direct labor: 11,220 hours at $17.20.
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 $ - Favorable
- Unfavorable
- Not applicable
Materials Usage Variance $ - Favorable
- Unfavorable
- Not applicable
2. Compute the rate variance and the efficiency variance for direct labor.
Labor Rate Variance $ - Favorable
- Unfavorable
- Not applicable
Labor Efficiency Variance $ - Favorable
- Unfavorable
- Not applicable
Feedback
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".
- Accounts Payable
- Cash
- Direct Labor Efficiency Variance
- Direct Materials Usage Variance
- Materials
- Work in Process
- Accounts Payable
- Direct Labor Efficiency Variance
- Direct Materials Price Variance
- Direct Materials Usage Variance
- Wages Payable
- Work in Process
- Accounts Payable
- Cash
- Direct Labor Efficiency Variance
- Direct Materials Usage Variance
- Materials
- Wages Payable
Record purchase of materials - Cash
- Direct Labor Efficiency Variance
- Direct Materials Price Variance
- Materials
- Wages Payable
- Work in Process
- Accounts Payable
- Direct Labor Efficiency Variance
- Direct Materials Price Variance
- Direct Materials Usage Variance
- Materials
- Wages Payable
- Accounts Payable
- Direct Materials Price Variance
- Direct Materials Usage Variance
- Materials
- Wages Payable
- Work in Process
Record usage of materials - Accounts Payable
- Direct Materials Price Variance
- Direct Materials Usage Variance
- Materials
- Wages Payable
- Work in Process
- Accounts Payable
- Cash
- Direct Labor Rate Variance
- Direct Materials Price Variance
- Direct Materials Usage Variance
- Materials
- Accounts Payable
- Cash
- Direct Labor Efficiency Variance
- Direct Materials Price Variance
- Direct Materials Usage Variance
- Materials
- Accounts Payable
- Direct Materials Price Variance
- Direct Materials Usage Variance
- Materials
- Wages Payable
- Wages Expense
Record labor variances
Related Book For
Accounting Information Systems
ISBN: 9780132871938
11th Edition
Authors: George H. Bodnar, William S. Hopwood
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