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". Materials Direct Materials Price Variance Accounts Payable Record purchase of materials Work in Process Direct Materials Usage Variance Materials Record usage of materials Work in Process Direct Labor Rate Variance Direct Labor Efficiency Variance Wages Payable Record labor variances > > x > x x x x x > x > > >
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". Materials Direct Materials Price Variance Accounts Payable Record purchase of materials Work in Process Direct Materials Usage Variance Materials Record usage of materials Work in Process Direct Labor Rate Variance Direct Labor Efficiency Variance Wages Payable Record labor variances > > x > x x x x x > x > > >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 (6.20 oz. @ $0.20) $1.24
Direct labor (0.08 hr. @ $18.00)
1.44
Standard prime cost
$2.68
During the first week of operation, the company experienced the following actual results:
a. Bars produced: 141,000.
b. Ounces of direct materials purchased: 874,500 ounces at $0.21 per ounce.
c. There are no beginning or ending inventories of direct materials.
d. Direct labor: 11,140 hours at $17.30.
Required:
Instructions for parts
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
8,745
Unfavorable
Materials Usage Variance
60
Unfavorable
2. Compute the rate variance and the efficiency variance for direct labor.
Labor Rate Variance
7,798 V
Favorable
Labor Efficiency Variance
2,520 V
Favorable
Transcribed Image Text: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".
Materials
Direct Materials Price Variance
Accounts Payable
X
Record purchase of materials
Work in Process
X
Direct Materials Usage Variance
X
Materials
Record usage of materials
Work in Process
Direct Labor Rate Variance
Direct Labor Efficiency Variance
X
Wages Payable
Record labor variances
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