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Direct Labor and Direct Materials Variances, Journal Entries

Jameson Company produces paper towels. The company has established the following direct materials and direct labor standards for one case of paper towels:

Paper pulp (3 lbs. @ $0.40)	$ 1.20
Labor (2 hrs. @ $12)	24.00
Total prime cost	$25.20

During the first quarter of the year, Jameson produced 40,000 cases of paper towels. The company purchased and used 120,700 pounds of paper pulp at $0.37 per pound. Actual direct labor used was 81,000 hours at $12.20 per hour.

Required:

Instructions for parts 1 and 2: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.

1. Calculate the direct materials price and usage variances.

Materials Price Variance	$fill in the blank 65ca92001ffcff6_1
Materials Usage Variance	$fill in the blank 65ca92001ffcff6_3

2. Calculate the direct labor rate and efficiency variances.

Labor Rate Variance	$fill in the blank 65ca92001ffcff6_5
Labor Efficiency Variance	$fill in the blank 65ca92001ffcff6_7

3. Prepare the journal entries for (1) the direct materials price variance, (2) the direct materials usage variance, and (3) the direct labor variances. If an amount box does not require an entry, leave it blank or enter "0".

1.		fill in the blank 984790097025047_2	fill in the blank 984790097025047_3
		fill in the blank 984790097025047_5	fill in the blank 984790097025047_6
		fill in the blank 984790097025047_8	fill in the blank 984790097025047_9
2.		fill in the blank 984790097025047_11	fill in the blank 984790097025047_12
		fill in the blank 984790097025047_14	fill in the blank 984790097025047_15
		fill in the blank 984790097025047_17	fill in the blank 984790097025047_18
3.		fill in the blank 984790097025047_20	fill in the blank 984790097025047_21
		fill in the blank 984790097025047_23	fill in the blank 984790097025047_24
		fill in the blank 984790097025047_26	fill in the blank 984790097025047_27
		fill in the blank 984790097025047_29	fill in the blank 984790097025047_30

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