Following Is the Information About Standard Inc Variable Cost @ $2 Per Hour
Total Variable Cost, $18,000

question 157

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:
$\begin{array}{lrr} \text { Standard Costs } &\\ \text {2,500 kilograms@\$8 } & \text {Direct material}\\ \text { 7,500 hours @\$12 } & \text { Direct labor}\\\\ \text { Actual Costs } &\\ \text { 2,600 kilograms@\$8.75 } & \text {Direct material }\\ \text { 7,400 hours @ \( \$ 11.40 \) } & \text {Direct labor}\\\\ \text { Factory overhead (100\% capacity } &\\ \text { \( 10,000 \mathrm{hrs}) : \) } &\\\end{array}$
Variable cost @ $2 per hour
Total variable cost, $18,000
Fixed cost @ $0.80 per hour
Total fixed cost, $8,000
Refer to the information provided for Standard Inc. 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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