Kelly's Pillow Company manufactures pillows.The current year operating budget is based on production of 40,000 pillows with 0.5 machine-hour allowed per pillow.Variable manufacturing overhead is anticipated to be $440,000.Actual production was 36,000 pillows using 19,000 machine-hours.Actual variable costs were $20 per machine-hour.Required:
Calculate the variable overhead rate and efficiency variances.

Question

Quizplus · Accepted Answer

The Answer of Kelly's Pillow Company manufactures pillows.The current year operating budget is based on production of 40,000 pillows with 0.5 machine-hour allowed per pillow.Variable manufacturing overhead is anticipated to be $440,000.Actual production was 36,000 pillows using 19,000 machine-hours.Actual variable costs were $20 per machine-hour.Required:
Calculate the variable overhead rate and efficiency variances.

Kelly's Pillow Company Manufactures Pillows