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: Bars produced: 145,000. Ounces of direct materials purchased: 899,300 ounces at $0.21 per ounce. There are no beginning or ending inventories of direct materials. Direct labor: 11,460 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.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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 (6.20 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:

  1. Bars produced: 145,000.
  2. Ounces of direct materials purchased: 899,300 ounces at $0.21 per ounce.
  3. There are no beginning or ending inventories of direct materials.
  4. Direct labor: 11,460 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.
 
 
2. Compute the rate variance and the efficiency variance for direct labor.
9,168 V
Favorable
Labor Rate Variance
Labor Efficiency Variance
Favorable
Feedback
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".
Record purchase of materials
BE
Record usage of materials
Record labor variances
Transcribed Image Text:2. Compute the rate variance and the efficiency variance for direct labor. 9,168 V Favorable Labor Rate Variance Labor Efficiency Variance Favorable Feedback 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". Record purchase of materials BE Record usage of materials Record labor variances
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