Cabot Company Collected the Following Data Regarding Production of One

Cabot Company collected the following data regarding production of one of its products.Compute the direct materials cost variance. $$\begin{array} { l l } \text { Direct materials stardard (6lbs. @ } \$ 2 / lb ) & \$ 12 \mathrm { per } \text { firished urit } \\\text { Actual direct materials used } & 243,000 \mathrm { lbs } \\\text { Actual firished urits produced } & 40,000 \mathrm { units } \\\text { Actual cost of direct materials used } & \$ 483,570\end{array}$$

A) $6,000 favorable.
B) $3,570 unfavorable.
C) $2,430 favorable.
D) $6,000 unfavorable.
E) $3,570 favorable.

Correct Answer:

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