PART B: DIRECT MATERIALS AND DIRECT LABOR VARIANCES

At the beginning of June, Faiz Mainan Sdn. Bhd. budgeted 5,000 toys action figures to be manufactured in June at standard direct materials and direct labor costs as follows:

Direct materials RM50,000

Direct labor RM36,000

Total RM86,000

The standard materials price is RM4.00 per pound. The standard direct labor rate is RM18.00 per hour. At the end of June, the actual direct materials and direct labor costs were as follows:

Actual direct materials RM49,600

Actual direct labor RM34,020

Total RM83,620

There were no direct materials price or direct labor rate variance for June. In addition, assume no charges in the direct materials inventory balances in June. Faiz Mainan Sdn. Bhd. actually produced 4,850 units of toys action figures during June.

REQUIRED:

1. Determine the direct materials price variance.
2. Determine the direct labor rate variance.