What is the term used to describe the concept of only investigating the variances for which the benefits of correction exceed the costs of follow-up?

Management by exception

Variance analysis

Controllability

None of these.

Low cost variance investigation

In its first month of operations, Multiplex Corporation purchased 40,000 pounds of material for $3.40 per pound. The company used 38,000 pounds of the material to produce 18,000 units of its only product. Multiplex uses a standard cost system and its standard quantity and price per unit are 2 pounds at $3.50 per pound. What was the material efficiency variance for the month?

$7,000 favorable

$5,000 favorable

$7,000 unfavorable

$5,000 unfavorable

None of these.