The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows:
A)$1,875 unfavorable.
B)$1,950 favorable.
C)$1,875 favorable.
D)$1,950 unfavorable.

Question

Quizplus · Accepted Answer

We need to compare the standard costs and actual costs for direct materials for 2,500 units of product to determine if the costs are favorable (lower than expected) or unfavorable (higher than expected). 
Standard cost for direct materials per unit = $10 
Total standard cost for direct materials for 2,500 units = $10 x 2,500 = $25,000 
Actual cost for direct materials per unit = $7.50 
Total actual cost for direct materials for 2,500 units = $7.50 x 2,500 = $18,750 
Variance in direct materials cost = Standard cost - Actual cost 
= $25,000 - $18,750 
= $6,250 favorable 
Therefore, the actual direct materials cost is $6,250 less than the standard direct materials cost, which is favorable. The correct answer choice is C.

The Standard Costs and Actual Costs for Direct Materials for the Manufacture