Direct Materials and Direct Labor VariancesZoller 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)$1.24Direct labor (0.08 hr. @ $18.00)1.44Standard prime cost$2.68During 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. 2. Compute the rate variance and the efficiency variance for direct labor.9,168 VFavorableLabor Rate VarianceLabor Efficiency VarianceFavorableFeedback3. Prepare the journal entries associated with direct materials and direct labor. If an amount box does not require anentry, leave it blank or enter "0".Record purchase of materialsBERecord usage of materialsRecord labor variances

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Description: Direct Materials and Direct Labor VariancesZoller 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)$1.24Direct labor (0.08 hr. @ $18.00)1.44

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Chapter10: Standard Costing And Variance Analysis

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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:

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.

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

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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