Variance Analysis

Donovans Chocolates produces a popular candy bar called Dono. The candy is produced in Amsterdam and exported to the United States. Recently, the company adopted the following standards for one ten-ounce bar:

Direct materials -- 5 oz. @ $0.05 per oz

Direct labor -- 0.05 hour @ $7.00 per hour

Expected weekly sales 100,000 bars

Expected sales price $1.50

During the first week of operations the company had the following sales and expenses:

Bars produced 120,000

Ounces of materials purchased and used 620,000

Cost of direct materials $34,100

Direct labor 5,900 hours

Direct labor cost $42,775

Sales revenue $128,000

Bars sold 80,000

Required: a) Determine the labor rate and efficiency variances and show your work