Reference no: EM132515335

Question - A company uses the following standard costs to produce a single unit of output.

Direct materials 6 pounds at $0.70 per pound = $4.20

Direct labor 0.4 hour at $10.00 per hour = $4.00

Manufacturing overhead 0.4 hour at $3.90 per hour = $1.56

During the latest month, the company purchased and used 57,000 pounds of direct materials at a price of $0.80 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $36,864 based on 3,840 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $12,600 and fixed manufacturing overhead incurred was $10,000. Based on this information, calculate the direct materials price variance for the month?

a. $4,000 unfavorable

b. $9,300 favorable

c. $1,000 favorable

d. $5,700 unfavorable

e. $9,300 unfavorable