Jakes Cheese Company produces gourmet cheese for resale at local grocery stores. Jakes expected to use 3.0 pounds of direct materials to produce one unit (batch) of product at a cost of $8 per pound. Actual results are in for last year, which indicates 45,000 units of cheese were sold. The company purchased 160,000 pounds of materials at $7.50 per pound, and used 145,000 pounds in production.

What is Jake's materials price variance?

$72,500 unfavorable

($80,000) favorable

$80,000 unfavorable

($72,500) favorable