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38. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead; Journalizing Direct Materials and Direct Labor Transactions (Includes Appendix). Prefab Pools Company produces large prefabricated in-ground swimming pools made of a specialized plastic material. The master budget shows the following standards information and indicates the company expected to produce and sell 600 units for the month of April. Prefab Pools actually produced and sold 580 units for the month. During the month, the company purchased 330,000 pounds of material for $2,277,000 and used 295,800 pounds in production. A total of 25,520 labor hours were worked during the month at a cost of $313,896. Variable overhead costs totaled $790,000 for the month. Required: 1. Calculate the materials price variance and materials quantity variance using the format shown in Figure 4.4 "Direct Materials Variance Analysis for Jerry's Ice Cream". Clearly label each variance as favorable or unfavorable. 2. Calculate the labor rate variance and labor efficiency variance using the format shown in Figure 4.6 "Direct Labor Variance Analysis for Jerry's Ice Cream". Clearly label each variance as favorable or unfavorable. 3. Calculate the variable overhead spending variance and variable overhead efficiency variance using the format shown in Figure 4.8 "Variable Manufacturing Overhead Variance Analysis for Jerry's Ice Cream". Clearly label each variance as favorable or unfavorable. 4. Company policy is to investigate all variances at or above 2 percent of the flexible budget for direct materials and 4 percent for direct labor and variable overhead. Identify which of the six variances calculated in requirements a through c should be investigated. 5. Provide two possible explanations for each variance identified in requirement d. 6. Based on your answer to requirement a, prepare a journal entry to record the purchase of raw materials. 7. Based on your answer to requirement a, prepare a journal entry to record the usage of raw materials. 8. Based on your answer to requirement b, prepare a journal entry to record direct labor costs

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