Material Variance if quantity of materials purchased = quantity of materials used:

Zapato Corporation produces leather boots. The company uses a standard cost system and has set the following standards for materials and labor (for one pair of boots):

Leather (3 strips @ $10) $30

Direct labor (2 hrs. @ $12) $24

Total prime cost $54

During the year, Zapato produced 2,000 pairs of leather boots. The actual leather purchased was 6,200 strips at $9.96 per strip. There were no beginning or ending inventories of leather. Actual. direct labor was 4,200 hours @ $12.50. Required:

1. Break down the total variance for materials into a price variance and a usage variance. Prepare the journal entries associated with these variances.

2. Break down the total variance for labor into a rate variance and an efficiency variance. Prepare the journal entries associated with these variances