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

Standard Quantity

Standard Cost per bag

Direct material

20 pounds


Direct labor

0.1 hours


Variable overhead

0.1 hours


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

The materials price variance for January is