derailluer size

Sheldon Brown seems to say that a medium is the way to go, but that a "small/SS" should work as well, though he notes that there's no real reason to use one.

http://sheldonbrown.com/harris/derailers-rear.html

According to United Bicycle Institute:

1. Determine Maximum Chainring Difference by subracting the number of teeth in the smallest chainring from the number of teeth in the largest chainring

2. Determine Maximum Cassette Cog Difference by subtracting the number of teeth on the smallest cassette cog from the number of teeth on the largest cassette cog

3. Determine Total Drivetrain Capacity by adding Maximum Chainring Difference to theMaximum Cassette Cog Difference

4. Record the Maximum Cassette Cog (the number of teeth on the largest Cassette Cog)

For Shimano:

SS - Short Cage Road Double - Maximum Cassette Cog is 27 and Total Capacity is 29

GS - Medium Cage MTB/Road Triple - Maximum Cassette Cog is 34(MTB)/27(Road) and Total Capacity is 33(MTB)/37(Road)

SGS - Long MTB - Maximum Cassette Cog is 34 and Total Capacity is 45

For SRAM:

Short - Maximum Cassette Cog is 34(MTB)/28(Road) and Total Capacity is 32(MTB)/31(Road)

Medium - Maximum Cassette Cog is 34 and Total Capacity is 37

Long - Maximum Cassette Cog is 34 and Total Capacity is 45

For Campagnolo:

Short - Maximum Cassette Cog is 26 and Total Capacity is 27

Medium - Maximum Cassette Cog is 29 and Total Capacity is 36

Long - Maximum Cassette Cog is 29 and Total Capacity is 39

Capacity comes into play when you are running small / small so in the OP the 34-12 combination. With the 34-12 combination there is a lot of excess chain that need to be accounted for. The cage picks up the chain.

50-27 combination is controlled by chain length. Cage has nothing to do with it

The maximum rear cog size is controlled the size of the parrallogram and a lesser degree the B screw.