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Direct Materials and Direct Labor Variances

Zoller Company produces a dark chocolate candy bar. Recently, the company adopted the following standards for one bar of the candy:

Direct materials (6.30 oz. @ $0.20)	$1.26
Direct labor (0.08 hr. @ $18.00)	1.44
Standard prime cost	$2.70

During the first week of operation, the company experienced the following actual results:

1. Bars produced: 141,000.
2. Ounces of direct materials purchased: 888,600 ounces at $0.21 per ounce.
3. There are no beginning or ending inventories of direct materials.
4. Direct labor: 11,140 hours at $17.20.

Required:

Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.

1. Compute price and usage variances for direct materials.

Materials Price Variance	$fill in the blank f75ad9004fdefba_1	FavorableUnfavorableNot applicable
Materials Usage Variance	$fill in the blank f75ad9004fdefba_3	FavorableUnfavorableNot applicable

2. Compute the rate variance and the efficiency variance for direct labor.

Labor Rate Variance	$fill in the blank f75ad9004fdefba_5	FavorableUnfavorableNot applicable
Labor Efficiency Variance	$fill in the blank f75ad9004fdefba_7	FavorableUnfavorableNot applicable

3. Prepare the journal entries associated with direct materials and direct labor. If an amount box does not require an entry, leave it blank or enter "0".

	Accounts PayableCashDirect Labor Efficiency VarianceDirect Materials Usage VarianceMaterialsWork in Process	- Select -	- Select -
	Accounts PayableDirect Labor Efficiency VarianceDirect Materials Price VarianceDirect Materials Usage VarianceWages PayableWork in Process	- Select -	- Select -
	Accounts PayableCashDirect Labor Efficiency VarianceDirect Materials Usage VarianceMaterialsWages Payable	- Select -	- Select -
	Record purchase of materials
	CashDirect Labor Efficiency VarianceDirect Materials Price VarianceMaterialsWages PayableWork in Process	- Select -	- Select -
	Accounts PayableDirect Labor Efficiency VarianceDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWages Payable	- Select -	- Select -
	Accounts PayableDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWages PayableWork in Process	- Select -	- Select -
	Record usage of materials
	Accounts PayableDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWages PayableWork in Process	- Select -	- Select -
	Accounts PayableCashDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceMaterials	- Select -	- Select -
	Accounts PayableCashDirect Labor Efficiency VarianceDirect Materials Price VarianceDirect Materials Usage VarianceMaterials	- Select -	- Select -
	Accounts PayableDirect Materials Price VarianceDirect Materials Usage VarianceMaterialsWages PayableWages Expense	- Select -	- Select -
	Record labor variances

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