Vitko Corporation Makes Automotive Engines

question 103

Essay

Vitko 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:

C Corporations

A type of corporation subject to corporate income tax, with profits distributed to shareholders as dividends.

Report

A written or spoken account of something that has been observed, heard, done, or investigated.

Form 1120

The U.S. Corporate Income Tax Return, a form used by corporations to report their income, gains, losses, deductions, and credits to the IRS.

C Corporations

A type of business entity that is taxed separately from its owners, providing limited liability to its shareholders.