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. 1.44 @$18.00) Standard prime cost $2.70 During the first week of operation, the company experienced the following actual results: a. Bars produced: 145,000. 6. Ounces of direct materials purchased: 913,800 ounces at $0.21 per ounce. C. There are no beginning or ending inventories of direct materials. d. Direct labor: 11,460 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 $ 9,012 X Unfavorable Variance Materials Usage 60 Unfavorable Variance 2. Compute the rate variance and the efficiency variance for direct labor. . Labor Rate Variance $7,910 Favorable Labor Efficiency $ 2,520 Favorable Variance Feedback Check My Work 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. 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 180,240 x Direct Materials Price Variance 9,012 x Accounts Payable 189,252 x Record purchase of materials Work in Process 180,180 x 60 Direct Materials Usage Variance Materials Record usage of materials 180,240 x 205,920 x 7,910 X Work in Process Direct Labor Rate Variance Direct Labor Efficiency Variance Wages Payable Record labor variances 2,520 195,490 x 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. 1.44 @$18.00) Standard prime cost $2.70 During the first week of operation, the company experienced the following actual results: a. Bars produced: 145,000. 6. Ounces of direct materials purchased: 913,800 ounces at $0.21 per ounce. C. There are no beginning or ending inventories of direct materials. d. Direct labor: 11,460 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 $ 9,012 X Unfavorable Variance Materials Usage 60 Unfavorable Variance 2. Compute the rate variance and the efficiency variance for direct labor. . Labor Rate Variance $7,910 Favorable Labor Efficiency $ 2,520 Favorable Variance Feedback Check My Work 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. 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 180,240 x Direct Materials Price Variance 9,012 x Accounts Payable 189,252 x Record purchase of materials Work in Process 180,180 x 60 Direct Materials Usage Variance Materials Record usage of materials 180,240 x 205,920 x 7,910 X Work in Process Direct Labor Rate Variance Direct Labor Efficiency Variance Wages Payable Record labor variances 2,520 195,490 x