Standard Costs, Decomposition of Budget Variances, Direct Materials and Direct Labor

Haversham Corporation produces dress shirts. The company uses a standard costing system and has set the following standards for direct materials and direct labor (for one shirt):

During the year, Haversham produced 9,800 shirts. The actual fabric purchased was 14,600 yards at $2.74 per yard. There were no beginning or ending inventories of fabric. Actual direct labor was 10,900 hours at $19.60 per hour.

Required:

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