Precilla Company Uses a Standard Costing System That Allows 2

Multiple Choice

Precilla Company uses a standard costing system that allows 2 pounds of direct materials for one finished unit.During July,the company purchased 40,000 pounds of direct materials for $210,000 and manufactured 12,000 finished units.The standard direct materials cost allowed for the units manufactured is $120,000.The performance report shows that Pricilla has an unfavorable direct materials usage variance of $5,000.Also,the company records any price variance for materials at time of purchase.
The direct materials purchase-price variance in July is:

A) $10,000 unfavorable.
B) $50,000 unfavorable.
C) $80,000 unfavorable.
D) $86,000 unfavorable.
E) $90,000 unfavorable.