The budget for the month of May was for 14,400 units at a direct materials cost of $27 per unit. Direct labor was budgeted at 36 minutes per unit for a total of $129,600. Actual output for the month was 9,700 units with $157,500 in direct materials and $89,775 in direct labor expense. The direct labor standard of 36 minutes was obtained throughout the month. Variance analysis of the performance for the month of May would show a(n): (CMA adapted)

Multiple Choice

• A) favorable direct labor efficiency variance of $2,475.

• B) unfavorable direct labor efficiency variance of $2,475.

• C) unfavorable direct labor price (rate) variance of $2,475.

• D) favorable materials efficiency (quantity) variance of $8,700.