(solution) Use the information below to answer the followingquestion(s).

(solution) Use the information below to answer the followingquestion(s).

Use the information below to answer the followingquestion(s).

Tractor Corporation produces toy tractors. The company uses the following direct costcategories:

Category Standard Inputs for 1 output Std. Cost per input
Direct Materials 4.00 $12.50
Direct Labour 1.40 9.50
Direct Marketing 0.54 5.50

Actual performance and budgeted performance for the company is shownbelow:

Actualoutput: (inunits) 5,000

DirectMaterials:

Materials costs $299,000
Input purchased and used 23,000
Actual price per input $13.00

Direct ManufacturingLabour:

Labour costs $95,000
Labourminus?hours of input 9,500
Actual price per hour $10.00

Direct MarketingLabour:

Labour costs $40,000
Labourminus?hours of input 5,000
Actual price per hour $8.00

What is the price variance of the direct materials?

A. $10,000 unfavourable
B. $11,500 unfavourable
C. $11,000 favourable
D. $11,500 favourable
E. $10,000 favourable