Marmot Products began production of a new product on April 1. The company uses a standard costing system and has established the following standards for one unit of the new product Direct materials Direct labour Standard Quantity or Hours 3.5 metres 0.4 hours Standard Price or Rate $ 6 per metre $10 per hour Standard Cost $ 21 $ 4 During April, the following activity was recorded regarding the new product: a. Purchased 7000 metres of materials at a cost of $575 per metre. b. Used 6,000 metres of materials to produce 1,500 units of the new product c. Worked 725 direct labour-hours on the new product at a cost of $8,120 Required: 1. For direct materials a. Compute the direct materials price and quantity variances. (Indicate the effect of each variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance). Materials price variance Materials quantity variance b. Prepare journal entries to record the purchase of materials and the use of materials in production View transaction list Journal entry worksheet 1 2 Record the purchase of materials. Note: Enter debits before credits. Event General Journal Debit Credit 1 2 For direct labour: o. Compute the direct labour rate and efficiency variances. (Indicate the effect of each variance by selecting "P" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Labour rate variance Labour efficiency variance b. Prepare journal entries to record the incurrence of direct labour cost for the month View transaction list Journal entry worksheet Record the incurrence of direct labour cost for the month. Note: Enter debits before credits Event General Journal Debit Credit 1 3. Post the entries you have prepared to the T-accounts below: Raw Materials Accounts Payable Beg bal Beg, bal End, bal End, bal Materials Price Variance Wages Payable Beg. bal Beg. bal End, bal End, bal Materials Quantity Variance Labour Rate Variance Beg bal Beg bal End bal End bal End bal End bal Materials Quantity Variance Labour Rate Variance Beg bal Beg bal End, bal End, bal Work in Process Labour Efficiency Variance Beg. bal Beg bal End, bal End bal