Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:

Materials:	(7 kilograms $10 per kilogram)	$	70
Labor:	(4 hours $19 per hour)	$	76

All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:

In-process beginning inventory		none
In-process ending inventory90% complete as to labor		1,500	units
Units completed during the month		6,570	units
Budgeted output		7,300	units
Purchases of materials, in kilograms (AQ)		26,000
Total actual labor costs incurred	$	524,000
Direct labor hours worked (AQ)		25,000	hours
Materials purchase-price variance	$	2,600	unfavorable
Increase in materials inventory in July		1,700	kilograms
Beginning inventory of materials		0	kg.

The direct labor flexible-budget variance for July, to the nearest dollar, was:

Multiple Choice

$26,320 unfavorable.

$85,120 favorable.

$26,920 unfavorable.

$77,920 favorable.

$70,720 favorable.