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Jellybean Flavor Labs makes the cherry flavor for a famous jelly bean and uses a...

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Accounting

Jellybean Flavor Labs makes the cherry flavor for a famous jelly bean and uses a standard costing system. They have provided the following standard information:

Direct materials: 2.5 ounces at $20 per ounce

Direct labor: 1.4 hours at $12.50 per hour

Variable manufacturing overhead: 1.4 hours at 3.50 per hour

Variable manufacturing overhead is applied on the basis of standard direct labor-hours. The following data are available for December:

  • 3,750 units of compound were produced during the month.
  • There was no beginning direct materials inventory.
  • Direct materials purchased: 12,000 ounces for $225,000.
  • The ending direct materials inventory was 2,000 ounces.
  • Direct labor-hours worked: 5,600 hours at a cost of $67,200.
  • Variable manufacturing overhead costs incurred amounted to $18,200.
  • Variable manufacturing overhead applied to products: $18,375.

The materials price variance for December is:

Question 17 options:

$15,000 Unfavorable

$15,000 Favorable

$25,000 Unfavorable

$25,000 Favorable

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