Machine Builders Inc. adopted a standard cost system several years ago that it uses in conjunction with its process cost system. The per-unit standard costs for direct materials and direct labor for its single product are as follows:

Materials:	(5 kilograms $10 per kilogram)	$	50
Labor:	(6 hours $14 per hour)	$	84

All materials are issued at the beginning of processing. The operating data shown below were taken from the records for July:

In-process beginning inventory		none
In-process ending inventory90% complete as to labor		800	units
Units completed during the month		7,560	units
Budgeted output		8,400	units
Purchases of materials, in kilograms (AQ)		29,000
Total actual labor costs incurred	$	522,000
Direct labor hours worked (AQ)		36,000	hours
Materials purchase-price variance	$	3,500	unfavorable
Increase in materials inventory in July		1,200	kilograms
Beginning inventory of materials		0	kg.

The direct labor flexible-budget variance for July, to the nearest dollar, was:

Multiple Choice

• $121,920 unfavorable.

• $180,720 favorable.

• $166,320 favorable.

• $122,520 unfavorable.

• $173,520 favorable.