Reference no: EM132321873

Question

The McCarthy Company developed the following standards for the manufacture of its product: Each unit should have 2½ pounds of direct materials purchased at $4 per pound. Each unit should be produced in 1½ hours at a direct labor cost of $16 per hour.

Actual production was 6,000 units using 12,400 pounds of direct materials at a total cost of $60,800 and required 8,200 direct labor hours at a total cost of $110,400. What is the "cost" variance for direct materials? Use a positive number to indicate a favorable variance or a negative number to indicate an unfavorable variance.