In December of Year 2 operations (month 24), Memories, Inc. actually produced and sold 32,675 figurines, consisting of 30,570 dolls and 2,105 replicas, The budgeted sales price for dolls was $5.00, and $5.25 for replicas. The estimated production and sales during December was 31,678 dolls and 2,595 replicas.

Compute the price and quantity variances for direct materials for each type of figurine. MI paid $29,093 to purchase 32,325 units of raw materials for dolls and $1,453 to purchase 2,401 units of raw materials for replicas. (A unit consists of plastic, molds, varnish, paint, and packaging materials.) From the materials purchased, 30,995 units were used to produce the dolls and 2,149 were used to produce the replicas. How would these variances be interpreted? What might have caused them? Would you consider them large enough to be important?