Problem:
Catalina Chemicals, Inc. manufactures a specialized chemical blend with the following standards: Direct materials: 2.5 ounces at $20 per ounce Direct labor: 1.4 hours at $12.50 per hour Variable manufacturing overhead: 1.4 hours at $3.50 per hour Variable manufacturing overhead is allocated based on standard direct labor-hours. For July, the production details are as follows: 3,750 units of the blend were produced. There was no initial inventory of direct materials. Direct materials acquired: 12,000 ounces for $225,000. The final direct materials inventory totaled 2,000 ounces. Direct labor-hours totaled 5,600, costing $67,200. Variable manufacturing overhead costs incurred were $18,200. Variable manufacturing overhead allocated to products was $18,375. The materials price variance for July is: Group of answer choices $15,000 Unfavorable $15,000 Favorable $25,000 Unfavorable $25,000 Favorable