Long Hill LLC's purchasing manager obtained a special price on a metal alloy from a new supplier, resulting in a direct-material price variance of $10,000F. The alloy produced more waste than normal, as evidenced by a direct-material quantity variance of $2,000U, and was also difficult to use. This slowed worker efficiency, generating a $2,500U labor efficiency variance. To help remedy the situation, the production manager used senior line employees, which gave rise to a $1,300U labor rate variance. If overall product quality did not suffer, what variance amount is best used in judging the appropriateness of the purchasing manager's decision to acquire substandard material?

Multiple Choice

• $7,500F.

• $10,000F.

• $8,000F.

• $5,500F.

• $4,200F.

Cost standards for one unit of product no. 1895:
Direct material	3 pounds at $2.70 per pound	$	8.10
Direct labor	7 hours at $7.30 per hour		51.10
Actual results:
Units produced	5,800 units
Direct material purchased	26,400 pounds at $2.90	$	76,560
Direct material used	17,100 pounds at $2.90		49,590
Direct labor	40,900 hours at $7.10		290,390

Assume that the company computes variances at the earliest point in time. The direct-material quantity variance is:

Multiple Choice

• $810F.

• $24,300U.

• None of the answers is correct.

• $810U.

• $24,300F.