The management of Alpha Company has calculated the following variances: $$\begin{array} { | l | r | }
\hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 35,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \
\hline \text { Variable overhead cost variance } & 2,000 \mathrm {~F} \
\hline \text { Variable overhead efficiency variance } & 5,000 \mathrm {~F} \
\hline \text { Fixed overhead cost variance } & 3,050 \mathrm {~F} \
\hline
\end{array}$$ When determining the total production cost flexible budget variance, calculate the total manufacturing overhead variance of Alpha Company.
A) $5,000 F
B) $7,000 F
C) $3,050 F
D) $10,050 F

Question

The management of Alpha Company has calculated the following variances: $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 35,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \
\hline \text { Variable overhead cost variance } & 2,000 \mathrm {~F} \
\hline \text { Variable overhead efficiency variance } & 5,000 \mathrm {~F} \
\hline \text { Fixed overhead cost variance } & 3,050 \mathrm {~F} \
\hline
\end{array}$$ When determining the total production cost flexible budget variance, calculate the total manufacturing overhead variance of Alpha Company.
A) $5,000 F
B) $7,000 F
C) $3,050 F
D) $10,050 F

Quizplus · Accepted Answer

To calculate the total manufacturing overhead variance of Alpha Company, we need to add the variable overhead cost variance, the variable overhead efficiency variance, and the fixed overhead cost variance.
Total manufacturing overhead variance = Variable overhead cost variance + Variable overhead efficiency variance + Fixed overhead cost variance
Total manufacturing overhead variance = ($2,000 F) + ($5,000 F) + ($3,050 F) = $10,050 F
Therefore, the correct answer is D.

The Management of Alpha Company Has Calculated the Following Variances