The Budget for the Month of May Was for 9,000

Multiple Choice

The budget for the month of May was for 9,000 units at a direct materials cost of $15 per unit. Direct labor was budgeted at 45 minutes per unit for a total of $81,000. Actual output for the month was 8,500 units with $127,500 in direct materials and $77,775 in direct labor expense. The direct labor standard of 45 minutes was obtained throughout the month. Variance analysis of the performance for the month of May would show a(n) : (CMA adapted)

A) favorable materials efficiency (quantity) variance of $7,500.
B) favorable direct labor efficiency variance of $1,275.
C) unfavorable direct labor efficiency variance of $1,275.
D) unfavorable direct labor price (rate) variance of $1,275.