The management of Watchdog Security Systems has calculated the following variances: $$\begin{array} { | l | r | }
\hline \text { Direct materials cost variance } & \$ 9000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 37,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,500 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \
\hline \text { Total variable overhead variance } & 7500 \mathrm {~F} \
\hline \text { Total fixed overhead variance } & 3000 \mathrm {~F} \
\hline
\end{array}$$ What is the total direct labor variance of the company?
A) $15,500 F
B) $10,500 F
C) $27,500 F
D) $3500 F

Question

The management of Watchdog Security Systems has calculated the following variances: $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost variance } & \$ 9000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 37,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 15,500 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \
\hline \text { Total variable overhead variance } & 7500 \mathrm {~F} \
\hline \text { Total fixed overhead variance } & 3000 \mathrm {~F} \
\hline
\end{array}$$ What is the total direct labor variance of the company?
A) $15,500 F
B) $10,500 F
C) $27,500 F
D) $3500 F

Quizplus · Accepted Answer

The total direct labor variance is the sum of the direct labor cost variance and the direct labor efficiency variance, which is $15,500 F - $12,000 U = $3,500 F.

The Management of Watchdog Security Systems Has Calculated the Following