The Management of Delta Company Has Calculated the Following Variances

question 58

Multiple Choice

The management of Delta Company has calculated the following variances: $$\begin{array} { | l | r | } \hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \\\hline \text { Direct materials efficiency variance } & 35,000 \mathrm {~F} \\\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \\\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \\\hline \text { Total variable overhead variance } & 7,000 \mathrm {~F} \\\hline \text { Total fixed overhead variance } & 3,050 \mathrm {~F} \\\hline\end{array}$$ When determining the total production cost flexible budget variance, calculate the fixed overhead cost variance of Delta Company.

• A) $3,050 F
• B) $12,000 U
• C) $8,000 U
• D) $10,050 F

---

Definitions:

Capital Accumulation

The process of acquiring additional assets or capital goods aimed at increasing productive capacity or wealth.

Labor Productivity Growth

An increase in the output of goods and services per hour worked, which can lead to higher living standards and economic growth.

Real Wage

The purchasing power of wages, taking into account the impact of inflation, indicating how many goods and services wages can buy.

Nominal Wage

The wage or salary that is paid to workers in current dollars, without adjusting for inflation or purchasing power.