The Management of Alpha Company Has Calculated the Following Variances

question 6

Multiple Choice

The management of Alpha Company has calculated the following variances: $$\begin{array} { | l | r | } \hline \text { Direct materials cost variance } & \$ 8,000 \mathrm { U } \\\hline \text { Direct materials efficiency variance } & 35,000 \mathrm {~F} \\\hline \text { Direct labor cost variance } & 15,000 \mathrm {~F} \\\hline \text { Direct labor efficiency variance } & 12,000 \mathrm { U } \\\hline \text { Variable overhead cost variance } & 2,000 \mathrm {~F} \\\hline \text { Variable overhead efficiency variance } & 5,000 \mathrm {~F} \\\hline \text { Fixed overhead cost variance } & 3,050 \mathrm {~F} \\\hline\end{array}$$
-Calculate the total variable overhead variance of Alpha Company.

• A) $3,000 F
• B) $10,050 F
• C) $7,000 F
• D) $3,050 F

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Definitions:

Future Value

A future date's asset or cash value that matches a specific present-day amount.

Quarterly

relating to a three-month period or happening every quarter of a year.

Student Loan

A type of loan specifically designed to help students pay for post-secondary education and the associated fees, such as tuition, books, and living expenses.

Compounded Monthly

Interest calculated on a principal amount and then added to that principal sum at the end of each month, effectively increasing the base for future interest calculations.