Cole Laboratories makes and sells a lawn fertilizer called Fastgro. The company has developed standard costs for one bag of Fastgro as follows:

Standard Standard Cost

Quantity per bag

Direct material 20 pounds $8.00

Direct labor 0.1 hours $1.10

Variable overhead 0.1 hours $0.40

The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct-labor hours. During January, the company recorded the following activity:

‘ Production of Fastgro: 4,000 bags

‘ Direct materials purchased: 85,000 pounds at a cost of $32,300

‘ Direct-labor worked: 390 hours at a cost of $4,875

‘ Variable overhead incurred: $1,475

‘ Inventory of direct materials on January 31: 3,000 pounds

9. The materials price variance for January is

A. $1,700 F.

B. $1,640 U.

C. $1,640 F.

D. $1,300 U.

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