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A company uses the following standard costs to produce a single unit of output. Direct materials 6 pounds at $0.90 per pound = $ 5.40

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

Direct materials 6 pounds at $0.90 per pound = $ 5.40
Direct labor 0.5 hour at $12.00 per hour = $ 6.00
Manufacturing overhead 0.5 hour at $4.80 per hour = $ 2.40

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:

Multiple Choice

$1,800 favorable

$5,800 unfavorable

$1,800 unfavorable

$1,000 favorable

$6,000 unfavorable

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