The Management of Zeta Company Has Calculated the Following Variances

question 31

Multiple Choice

The management of Zeta Company has calculated the following variances: 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

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Definitions:

Variable Overhead

Indirect production costs that change in response to the level of production activity, such as utility costs in a manufacturing plant that vary with machine usage.

Rate Variances

The difference between the expected (standard) cost and the actual cost incurred for a rate-based expense, such as labor or materials.

Lubricants

Substances applied to surfaces to reduce friction, protect against wear, or provide lubrication, often essential in machinery and manufacturing processes.

Supplies

Items that are used in the day-to-day operations of a business, not directly part of the manufactured product but necessary for its production.