The management of Delta Pet Supplies has calculated the following variances: Dir
ID: 2537131 • Letter: T
Question
The management of Delta Pet Supplies has calculated the following variances:
Direct materials cost variance
$8,000 U
Direct materials efficiency variance
36,000 F
Direct labor cost variance
15,500 F
Direct labor efficiency variance
12,000 U
Total variable overhead variance
7,500 F
Fixed overhead cost variance
4,000 F
When determining the total production cost flexible budget variance, what is the fixed overhead cost variance of the company?
A.
$8,000 U
B.
$11,500 F
C.
$4,000 F
D.
$12,000 U
Direct materials cost variance
$8,000 U
Direct materials efficiency variance
36,000 F
Direct labor cost variance
15,500 F
Direct labor efficiency variance
12,000 U
Total variable overhead variance
7,500 F
Fixed overhead cost variance
4,000 F
Explanation / Answer
As per the data given in the question, when determining the total production cost flexible budget variance of Delta Pet Supplies, the fixed overhead cost variance is $4,000 F.
Therefore the correct option is C.) $4,000 F.
(The answer is given in the question as it is, hence no extra calculations are required)
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