A Company Uses the Following Standard Costs to Produce a Single

question 45

Multiple Choice

A company uses the following standard costs to produce a single unit of output. During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based on 4,900 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15,000 and fixed manufacturing overhead incurred was $10,400. Based on this information, the direct materials price variance for the month was:

• A) $6,000 unfavorable
• B) $1,800 favorable
• C) $1,000 favorable
• D) $5,800 unfavorable
• E) $1,800 unfavorable