Milar Corporation Makes a Product with the Following Standard Costs

Multiple Choice

Milar Corporation makes a product with the following standard costs: In January the company produced 2,000 units using 16,060 pounds of the direct material and 210 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $65,910. The actual direct labor cost was $4,473 and the actual variable overhead cost was $756.The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.The materials quantity variance for January is:

A) $2,640 Unfavorable
B) $2,574 Favorable
C) $2,640 Favorable
D) $2,574 Unfavorable