Question 9

The Company developed standard costs for direct material and direct labor. In 2022, the Company estimated the following standard costs for one of their major products, the 10-gallon plastic container.

Budgeted quantity Budgeted price

Direct materials 0.70 pounds $70 per pound

Direct labor 0.10 hours $35 per hour

During June, the Company produced and sold 25,000 containers using 23,000 pounds of direct materials at an average cost per pound of $75 and 17,500 direct manufacturing labor-hours at an average wage of $35.75 per hour. The direct material price variance during June is:

Group of answer choices

$500,000 favorable

$13,125 favorable

$500,000 unfavorable

$115,000 unfavorable

$115,000 favorable

$13,125 favorable