Reference no: EM132527048

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

Direct materials 7 pounds at $0.9 per pound=$6.30

Direct labor 0.20 hour at $9.00 per hour=$1.80

Manufacturing overhead 0.20 hour at $4.70 per hour=$.94

During the latest month, the company purchased and used 67,000 pounds of direct materials at a price of $1.10 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $14,620 based on 1,700 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $6,400 and fixed manufacturing overhead incurred was $17,000.

Question 1: Based on this information, the direct materials quantity variance for the month was:

Option 1: $13,400 unfavorable

Option 2: $2,700 unfavorable

Option 3: $2,700 favorable

Option 4: $2,000 favorable

Option 5: $13,400 favorable