Question

The total manufacturing cost variance consists of a.direct materials cost variance, direct labor rate variance, and factory overhead cost variance b.direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance c.direct materials cost variance, direct labor cost variance, and factory overhead cost variance d.direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance

Answer 1

Answer: The total manufacturing cost variance is made up of direct material cost variance, direct labor cost variance and factory overhead cost variance. (Option C).

Explanation:

Some of the goals of manufacturing companies are to increase company’s revenue and profit. To achieve this, a company needs to know how to manage its costs and these may cause variances in manufacturing.

The total manufacturing cost variance is made up of direct material cost variance, direct labor cost variance and factory overhead cost variance. These costs are the differences between the actual cost incurred and the set cost. These variances help managers to know if the company is meeting up to the required standard.