A company uses the following standard costs to produce a single unit of output. Direct materials 5 pounds at $1.10 per pound = $ 5.50 Direct labor 0.4 hour at $8.00 per hour = $ 3.20 Manufacturing overhead 0.4 hour at $4.70 per hour = $ 1.88 During the latest month, the company purchased and used 47,000 pounds of direct materials at a price of $1.20 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $28,425 based on 3,790 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $14,800 and fixed manufacturing overhead incurred was $12,000. Based on this information, the total direct materials cost variance for the month was:a.$5,800 favorable
b.$5,800 unfavorable
c.$1,800 favorable
d.$1,800 unfavorable
e.$1,000 favorable

The answer is c

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Answer(d); /// in the absence of transaction costs,private parties can solve the problem of externalities on their own;