Kelly's Pillow Company manufactures pillows. The 2011 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 for 2011 was 36,000 pillows using 19,000 machine-hours. Actual variable costs were $20 per machine-hour.
Required:
Calculate the variable overhead spending and efficiency variances.

Question

Quizplus · Accepted Answer

The Answer of Kelly's Pillow Company manufactures pillows. The 2011 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 for 2011 was 36,000 pillows using 19,000 machine-hours. Actual variable costs were $20 per machine-hour.
Required:
Calculate the variable overhead spending and efficiency variances.

Kelly's Pillow Company Manufactures Pillows