Hot Chocolate, We Got It!, LLC. is a manufacturer of premium flavored hot chocolates. Last Christmas season, the company produced 200,000 packs of its most popular hot chocolate mix, Sweet Peppermint. Production this Christmas season exceeded last seasons production by 25%.

One pack of hot chocolate mix is expected to use 2 tablespoons of cocoa at a standard direct material cost of $0.10 per tablespoon. As of November 1, the company had totally depleted its cocoa supply. During November, the company purchased 400,000 tablespoons of cocoa at a total cost of $80,000. At the end of the Christmas season, 15,000 tablespoons remained in inventory.

The expected direct labor cost per pack of Sweet Peppermint is $1.50. The company anticipates that 0.05 direct labor hours will be logged for each pack produced. During the month, the elves worked 15,000 direct labor hours and were paid $29.00 per hour.

Given the above data, which of the following statements is incorrect?

A.

A possible explanation for the DM Price variance is supply chain shortages which drove the price of cocoa up.

B.

The actual direct labor unit input ratio is 0.06 hours per pack.

C.

The Total Direct Material variance is an unfavorable $27,000

D.

The actual direct material price per unit of output is $0.20

E.

The direct labor hours allowed for the actual output level were less than the direct labor hours logged.