The management of Cleancut Lawnmowers has calculated the following variances: $$\begin{array} { | l | r | }
\hline \text { Direct materials cost variance } & \$ 8000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 38,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 17,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 13,000 \mathrm { U } \
\hline \text { Variable overhead cost variance } & 3500 \mathrm {~F} \
\hline \text { Variable overhead efficiency variance } & 5000 \mathrm {~F} \
\hline \text { Fixed overhead cost variance } & 3000 \mathrm {~F} \
\hline
\end{array}$$ When determining the total product cost flexible budget variance,what is the total manufacturing overhead variance of the company?
A) $5000 F
B) $8500 F
C) $3000 F
D) $11,500 F

Question

The management of Cleancut Lawnmowers has calculated the following variances: $$\begin{array} { | l | r | } 
\hline \text { Direct materials cost variance } & \$ 8000 \mathrm { U } \
\hline \text { Direct materials efficiency variance } & 38,000 \mathrm {~F} \
\hline \text { Direct labor cost variance } & 17,000 \mathrm {~F} \
\hline \text { Direct labor efficiency variance } & 13,000 \mathrm { U } \
\hline \text { Variable overhead cost variance } & 3500 \mathrm {~F} \
\hline \text { Variable overhead efficiency variance } & 5000 \mathrm {~F} \
\hline \text { Fixed overhead cost variance } & 3000 \mathrm {~F} \
\hline
\end{array}$$ When determining the total product cost flexible budget variance,what is the total manufacturing overhead variance of the company?
A) $5000 F
B) $8500 F
C) $3000 F
D) $11,500 F

Quizplus · Accepted Answer

The total product cost flexible budget variance is calculated as the difference between actual total product cost and budgeted total product cost. The manufacturing overhead variance is a component of the total product cost flexible budget variance. Therefore, to determine the total manufacturing overhead variance, we need to subtract the total direct material variance and the total direct labor variance from the total product cost flexible budget variance. Based on the information provided, we do not have the values for the direct material and direct labor variances. Hence, we cannot compute the answer directly. However, since D is the only option that includes the manufacturing overhead variance in the answer, and it is also the highest value, we can assume that D is the correct choice.

The Management of Cleancut Lawnmowers Has Calculated the Following Variances