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Question(s) / Instruction(s):

A company provided the following direct materials cost information. Compute the cost variance.
   


Standard costs assigned:

Direct materials standard cost (405,000 units @ $2/unit)                  $810,000

Actual costs:

Direct Materials costs incurred (403,750 units @ $2.20/unit)            $888,250

A. $2,500 Favorable.


B. $78,250 Favorable.


C. $78,250 Unfavorable.


D. $80,750 Favorable.


E. $80,750 Unfavorable.

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