Question

The controller for Durham Skates is reviewing the production cost report for July. An analysis of...

The controller for Durham Skates is reviewing the production cost report for July. An analysis of direct material costs reflects an unfavorable flexible budget variance of $25. The plant manager believes this is excellent performance on a flexible budget for 5,000 units of direct material. However, the production supervisor is not pleased with this result as he claims to have saved $1,200 in material cost on actual production using the 4,900 units of the direct materials purchased for the month. The standard material cost is $12 per unit. Actual material used for the month amounted to $60,025.

If the direct material variance was investigated further, it would reflect a quantity variance of:

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