Bondi Corporation Makes Automotive Engines

question 40

Essay

Bondi Corporation makes automotive engines. For the most recent month, budgeted production was 3,500 engines. The standard power cost is $1.50 per machine-hour. The company's standards indicate that each engine requires 11.3 machine-hours. Actual production was 3,800 engines. Actual machine-hours were 41,340 machine-hours. Actual power cost totaled $66,642.Required:Determine the rate and efficiency variances for the variable overhead item power cost and indicate whether those variances are unfavorable or favorable. Indicate whether each of the variances is favorable (F) or unfavorable (U).

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Definitions:

Doctrine of Privity

A principle that states a contract cannot confer rights or impose obligations arising under it on any person or agent except the parties to it.

Statutory Assignment

The transfer of rights or benefits from one party to another as permitted or dictated by statute.

Chose in Action

A personal right to property that is recoverable through legal action, such as debts owed or rights in a contract.

Contract Mistakes

Errors made by one or more parties that can affect the validity and enforceability of a contract.