Esteban Products produces instructional aids, including white boards, which use colored markers instead of chalk. These are particularly popular for conference rooms in educational institutions and executive offices of large corporations. The standard cost of materials for this product is 11 pounds at $8.65 per pound. During the first month of the year, 3,700 boards were produced. Information concerning actual costs and usage of materials follows: Materials purchased 40,300 lbs. @ $8.75 Materials used 39,800 lbs.

Required:

1. Compute the materials price and usage variances.

2. Prepare journal entries on Jan. 31 for all activity relating to materials.