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The total manufacturing cost variance consists of the factory overhead cost variance, the direct labor cost variance, and the direct materials cost variance. The actual costs incurred during the period differ from the standard costs set at the beginning.

What Is The Total Manufacturing Cost Variance?
The difference between the actual manufacturing costs and the standard manufacturing costs is the total manufacturing cost variance. This variance can be either favorable or unfavorable.

A favorable variance means that the costs of making something are less than expected, and an unfavorable variance means that the costs are more than expected.

The total manufacturing cost variance is essential to track because it can help identify areas where manufacturing costs can be reduced. By understanding the total manufacturing cost variance, businesses can improve their manufacturing process and save money.

Formula: Total manufacturing cost variance = Factory overhead cost variance + Direct labor cost variance + Direct materials cost variance

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