Response to the following problem:
Esteban Products produces instructional aids. Among the company's products are white boards, which use colored markers instead of chalk. They are particularly popular for conference rooms in educational institutions and executive offices of large corporations. The standard cost of materials for this product is 12 pounds at $8.25 per pound. During the first month of the year, 3,200 boards were produced.
Information concerning actual costs and usage of materials follows:
Materials purchased 38,000 lbs @ $8.35
Materials used 37,500 lbs
Required:
1. Compute the materials price and usage variances.
2. Prepare journal entries for all activity relating to materials.