The management of Zeta Company has calculated the following variances: $$\begin{array} { | l | r | }
\hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 35,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \
\hline \text { Total variable overhead variance } & 7,000 \mathrm {~F} \
\hline \text { Total fixed overhead variance } & 3,050 \mathrm {~F} \
\hline
\end{array}$$ Calculate the total direct materials variance of Zeta Company.
A) $3,000 F
B) $27,000 F
C) $10,050 F
D) $7,000 F

Question

The management of Zeta Company has calculated the following variances: $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 35,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \
\hline \text { Total variable overhead variance } & 7,000 \mathrm {~F} \
\hline \text { Total fixed overhead variance } & 3,050 \mathrm {~F} \
\hline
\end{array}$$ Calculate the total direct materials variance of Zeta Company.
A) $3,000 F
B) $27,000 F
C) $10,050 F
D) $7,000 F

Quizplus · Accepted Answer

Total direct materials variance = direct materials cost variance + direct materials efficiency variance
                               = 8,000 U - 35,000 F
                               = 27,000 F
Therefore, the correct answer is B.

The Management of Zeta Company Has Calculated the Following Variances