The Thompson Company uses standard costing and has established the following direct material and direct labor standards for each unit of Lept.

Question

Direct materials: 2 gallons at $4 per gallon
Direct labor: 0.5 hours at $8 per hour

During September, the company made 6,000 Lepts and incurred the following costs:

Direct materials purchased: 13,400 gallons at $4.10 per gallon
Direct materials used: 12,600 gallons
Direct labor used: 2,800 hours at $7.65 per hour

The materials price variance for September was:

Answer 1

1340 UNFAVORABLE