he management of Earth Barber Lawnmowers has calculated the following variances: Direct materials cost variance $10,000 U Direct materials efficiency variance 35,000 F Direct labor cost variance 16,000 F Direct labor efficiency variance 12,000 U Variable overhead cost variance 3000 F Variable overhead efficiency variance 6500 F Fixed overhead cost variance 4000 F Fixed overhead volume variance 2,500 FWhen determining the total product cost flexible budget variance, what is the total fixed overhead variance of the company? Group of answer choices $10,500 F $6500 F $5500 F $4000 F
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
The management of Earth Barber Lawnmowers has calculated the following variances:
| Direct materials cost variance | $10,000 U |
| Direct materials efficiency variance | 35,000 F |
| Direct labor cost variance | 16,000 F |
| Direct labor efficiency variance | 12,000 U |
| Variable |
3000 F |
| Variable overhead efficiency variance | 6500 F |
| Fixed overhead cost variance | 4000 F |
| Fixed overhead volume variance | 2,500 F |
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