The total manufacturing cost variance consists of:
A) Direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance
B) Direct materials cost variance, direct labor rate variance, and factory overhead cost variance
C) Direct materials cost variance, direct labor cost variance, variable factory overhead controllable variance
D) Direct materials cost variance, direct labor cost variance, factory overhead cost variance

Question

Quizplus · Accepted Answer

The total manufacturing cost variance is the difference between the actual manufacturing cost and the expected manufacturing cost. It consists of three variances: direct materials cost variance, direct labor cost variance, and factory overhead cost variance. The direct materials cost variance is the difference between the actual cost of materials used and the expected cost of materials used. The direct labor cost variance is the difference between the actual cost of labor used and the expected cost of labor used. The factory overhead cost variance is the difference between the actual cost of factory overhead and the expected cost of factory overhead. Therefore, option D is the best choice.

The Total Manufacturing Cost Variance Consists Of