Chemical Inc. has set the following standards for direct materials and direct labor for each 20-pound bag of Weed-Be-Doom: Per Bag Direct materials: 25 pounds XF–2000 @ $0.26/pound $ 6.50 Direct labor: 0.23 hour @ $30/hour 6.90 The firm manufactured 100,000 bags of Weed-Be-Doom in December and used 2,700,000 pounds of XF–2000 and 23,425 direct labor hours. During the month, the firm purchased 3,000,000 pounds of XF–2000 at $0.165 per pound and incurred a total payroll of $819,875 for direct labor. The firm records purchases at standard cost and therefore recognizes the direct materials price variance at point of purchase. 

Required: 

1. Compute the price and usage variances for direct materials and the rate and efficiency variances for direct labor. 

2. Prepare journal entries to record the preceding events.