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Question 1: Assume 26,000 gallons of direct material was purchased for $5.60 per gallon and 24,000 gallons were used. If the standard cost is $6.70 per gallon and variances are calculated at the earliest point possible, the direct material price variance would be:
Option 1: $28,600 U.
Option 2: $26,400 U.
Option 3: $2,200 F.
Option 4: $28,600 F.
Option 5: $26,400 F.
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