Answer:
C. $78,250 Unfavorable.
Explanation:
We know,
Material cost variance = (Standard quantity × Standard price) - (Actual Quantity × Actual price)
Given,
Standard quantity = 405,000 units
Standard price = $2.00 unit
Actual Quantity = 403,750 units
Actual price = $2.20 unit
Putting the values into the formula, we can get
Material cost variance = (Standard quantity × Standard price) - (Actual Quantity × Actual price)
Material cost variance = (405,000 × $2.00) - (403,750 × $2.20)
Material cost variance = $810,000 - $888,250
Material cost variance = -78,250
Material cost variance = 78,250 (Unfavorable)
Therefore, C is the answer.
