Huger Corporation makes automotive engines. For the most recent month, budgeted production was 6,900 engines. The budgeted power cost is $5.10 per machine-hour. The company's standards indicate that each engine requires 7.5 machine-hours. Actual production was 7,000 engines. Actual machine-hours were 53,240 machine-hours. Actual power cost totaled $247,598.
Required:
Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable. Show your work!

Question

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The Answer of Huger Corporation makes automotive engines. For the most recent month, budgeted production was 6,900 engines. The budgeted power cost is $5.10 per machine-hour. The company's standards indicate that each engine requires 7.5 machine-hours. Actual production was 7,000 engines. Actual machine-hours were 53,240 machine-hours. Actual power cost totaled $247,598.
Required:
Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable. Show your work!

Huger Corporation Makes Automotive Engines