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QUESTION - Jildy Leather Sdn Bhd produces a customized handmade leather wallet. The company uses a standard cost accounting system. During March 2021, 11,800 leather wallets were made. The following standard and actual cost data applied to the month of March when normal capacity was 15,000 direct labor hours. All materials purchased were used in production.
Cost Element
Standard (per unit)
Actual
Direct materials
5 meters of leather at RM 6.80 per meter
RM 410,400 for 57,000 meters (RM 7.20 per meter)
Direct labor
1.0 hours at RM 11.50 per hour
RM 125,440 for 11,200 hours (RM 11.20 per hour)
Required -
1. Determine the total, price and quantity variances for materials.
2. Determine the total, price and quantity variances for labor.
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