Trinket Company manufactures boxed costume jewelry sets and sells them to retailers. The company prepared the following static budget based on production of 100,000 sets.

At the end of the period, due to increased demand, the company had produced and sold 125,000 sets. The actual amount of indirect materials during the period was $220,000. On the flexible budget report, what is the difference for indirect materials, and is it favorable or unfavorable?

• A :

  $1,250 favorable

• B :

  $126,250 favorable

• C :

  $1,250 unfavorable

• D :

  $126,250 unfavorable

Indirect materials Indirect labor Utilities Depreciation Supervision Property taxes $175,000 325,000 250,000 260,000 325,000 40,000