The management of Guardian Fire Alarms has calculated the fo

The management of Guardian Fire Alarms has calculated the following variances: Direct materials cost variance Direct materials efficiency variance Direct labor cost variance Direct labor efficiency variance Total variable overhead variance Total fixed overhead variance $11,000 U 36,000 F 16,500 F 13,500 U 7,500 F 4,000 F What is the total direct materials variance of the company? OA. $3,000 F O B. $5,500 F O C. $11,500 F OD, $25,000 F

Solution

Correct Answer (D) $25000 Favorable

Explanation

Direct Material Efficiency variance                            $ 36000 F

Less: Direct Material Cost Variance                          $ 11000 U

Equals Total Direct Material Variance                      $ 25000 F