A company provided the following direct materials cost information. Compute the cost variance.

Standard costs assigned:
Direct materials standard cost (425,000 units @ $5 / unit)	$2,125,000
Actual costs:
Direct materials cost incurred (423,750 units @ $5.20 / unit)	$2,203,500

$84,750 Favorable.

$78,500 Unfavorable.

$6,250 Favorable.

$84,750 Unfavorable.

$78,500 Favorable.