The total manufacturing cost variance consists of

A) direct materials price variance, direct labor cost variance, and fixed factory overhead volume variance
B) direct materials cost variance, direct labor rate variance, and factory overhead cost variance
C) direct materials cost variance, direct labor cost variance, and variable factory overhead controllable variance
D) direct materials cost variance, direct labor cost variance, and factory overhead cost variance

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Gevorg Mkrtchyan · Accepted Answer

Final Answer : D, Explanation :  The total manufacturing cost variance is the difference between the standard cost of the actual production and the actual cost of the production. It consists of three variances: direct materials cost variance, direct labor cost variance, and factory overhead cost variance. Therefore, option D is the correct answer. Option A is incorrect because it includes a fixed factory overhead volume variance which is a separate variance. Option B is incorrect because it includes direct labor rate variance instead of direct labor cost variance. Option C is incorrect because it includes variable factory overhead controllable variance which is also a separate variance.

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