1B1K AT THE BEGINNING OF THE YEAR, DOUGLAS COMPANY PREPARED THE FOLLO...

106. CSO: 1B1e LOS: 1B1k

At the beginning of the year, Douglas Company prepared the following monthly budget

for direct materials.

Units produced and sold 10,000 15,000

Direct material $15,000 $22,500

At the end of the month, the company's records showed that 12,000 units were produced

and sold and $20,000 was spent for direct materials. The variance for direct materials is

a. $2,000 favorable.

b. $2,000 unfavorable.

c. $5,000 favorable.

d. $5,000 unfavorable.

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