Following Is the Information About Standard Inc $\text { Standard Costs }$

question 48

Multiple Choice

Following is the information about Standard Inc. The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500 units of product are as follows: $\text { Standard Costs }$
$\begin{array}{ll}\text { Direct materials } & 2,500 \text { kilograms } @ \$ 8 \\\text { Direct labor } & 7,500 \text { hours } @ \$ 12\end{array}$

$\underline{\text { Actual Costs} }$
$\begin{array}{ll}\text { Direct materials } & 2,600 \text { kilograms } @ \$ 8.75 \\\text { Direct labor } & 7,400 \text { hours } @ \$ 11.40\end{array}$

$\text { Factory overhead ( } 100 \% \text { capacity - } 10,000 \text { hrs.) : }$

Variable cost $@ \$ 2$ per hour
Total variable cost, $\$ 18,000$
Fixed cost $@ \$ 0.80$ per hour
Total fixed cost, $\$ 8,000$ ?
The amount of the direct materials quantity variance is:

• A) $875 favorable.
• B) $875 unfavorable.
• C) $800 favorable.
• D) $800 unfavorable.

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