Michael Corporation manufactures railroad cars, which is its only product. The standards for railroad cars are as follows:
Standard labor hours per car: 20
Standard labor cost per direct labor hour: $15.00
During the month of March, the company produced 1300 railroad cars. Related production data for the month follows:
Actual direct labor hours: 50,000
Actual direct labor total cost: $720,000
What is the direct labor efficiency variance for the month?
a) $150,000 favorable
b) $150,000 unfavorable
c) $120,000 favorable
d) $120,000 unfavorable