A Company Provided the Following Direct Materials Cost Information $\text {Standard costs assigned:}$

question 175

Multiple Choice

A company provided the following direct materials cost information. Compute the total direct materials cost variance. $\text {Standard costs assigned:}$
$\begin{array}{llr} \text {Direct materials standard cost \( (405,000 \) units @\$2.00/unit) } & \$ 810,000\\ \text { Actual costs:} &\\ \text {Direct Materials costs incurred ( 403,750 units@\$2.20/unit) } &\$ 888,250 \end{array}$

• A) $80,750 Unfavorable.
• B) $2,500 Favorable.
• C) $80,750 Favorable.
• D) $78,250 Favorable.
• E) $78,250 Unfavorable.

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Definitions:

Tension Reduction

A psychological process of relieving emotional or physical stress, often through various methods such as relaxation techniques, physical exercise, or therapeutic activities.

Observational Learning

The process of learning behaviors, skills, or attitudes by watching and imitating the actions of others.

Vicariously

Living through the experiences of another person via imagination or sympathy.

Reinforcement

In behaviorism, a consequence applied that strengthens an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.