Question

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: 144,000.
Ounces of direct materials purchased: 893,100 ounces at $0.21 per ounce.
There are no beginning or ending inventories of direct materials.
Direct labor: 11,380 hours at $17.30.
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 26d4e9f9e022fd8_1

Materials Usage Variance   $fill in the blank 26d4e9f9e022fd8_3

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

Labor Rate Variance   $fill in the blank 26d4e9f9e022fd8_5

Labor Efficiency Variance   $fill in the blank 26d4e9f9e022fd8_7

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".

   

fill in the blank 432ad5ff1fe8fdc_2
fill in the blank 432ad5ff1fe8fdc_3

fill in the blank 432ad5ff1fe8fdc_5
fill in the blank 432ad5ff1fe8fdc_6

fill in the blank 432ad5ff1fe8fdc_8
fill in the blank 432ad5ff1fe8fdc_9
Record purchase of materials      
   

fill in the blank 432ad5ff1fe8fdc_11
fill in the blank 432ad5ff1fe8fdc_12

fill in the blank 432ad5ff1fe8fdc_14
fill in the blank 432ad5ff1fe8fdc_15

fill in the blank 432ad5ff1fe8fdc_17
fill in the blank 432ad5ff1fe8fdc_18
Record usage of materials      
   

fill in the blank 432ad5ff1fe8fdc_20
fill in the blank 432ad5ff1fe8fdc_21

fill in the blank 432ad5ff1fe8fdc_23
fill in the blank 432ad5ff1fe8fdc_24

fill in the blank 432ad5ff1fe8fdc_26
fill in the blank 432ad5ff1fe8fdc_27

fill in the blank 432ad5ff1fe8fdc_29
fill in the blank 432ad5ff1fe8fdc_30
Record labor variances      

Answer 1

1.

_________________________________________________

______________________________________________

2.

_____________________________________________

_________________________________________________

3.

Account Titles	Debit	Credit
Direct materials [893,100 ounces × $0.20]	$178,620
Materials Price Variance	$8,931
Accounts Payable		$187,551
Work-in process Inventory (144,000 units × 6.20 ounces × $0.20)	$178,560
Materials usage variance	$60
Direct materials		$178,620
Work-in process Inventory (144,000 units × 0.08 hours × $18)	$207,360
Labor Rate Variance		$7,966
Labor Efficiency Variance		$2,520
Wages Payable [11,380 hours × $17.30 per hour]		$196,874