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Arctic Enterprises, Inc. freezes water into ice. The standard and actual costs for direct materials for the manufacture of 2,000 tons of ice are: Standard

Arctic Enterprises, Inc. freezes water into ice. The standard and actual costs for direct materials for the manufacture of 2,000 tons of ice are:

Standard costs Actual costs
Direct materials 9,900 gallons at $1.00 10,000 gallons at $.98

Which is true of the direct materials price and direct materials quantity variances?

Group of answer choices

The direct materials price variance is unfavorable; the direct materials quantity variance is favorable.

The direct materials price variance is favorable; the direct materials quantity variance is unfavorable.

Both are unfavorable.

Both are favorable.

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