Rudy Corporation Makes Automotive Engines

question 133

Essay

Rudy Corporation makes automotive engines.For the most recent month,budgeted production was 6,000 engines.The standard power cost is $8.80 per machine-hour.The company's standards indicate that each engine requires 6.1 machine-hours.Actual production was 6,400 engines.Actual machine-hours were 38,730 machine-hours.Actual power cost totaled $350,628.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!

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Definitions:

Inter-Entity Transactions

Transactions that occur between two divisions within the same company, often used for the purpose of allocating costs or revenues between those divisions.

NCI Adjustment

Adjustments made to account for the non-controlling interest's share in the equity of a subsidiary.

Profit

The financial benefit realized when revenue generated from business activities exceeds the expenses and costs.

Indirect NCI

Is a concept related to non-controlling interest (NCI) that involves the indirect ownership stake of a parent company in a subsidiary through its interest in another subsidiary.