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Kelly's Pillow Company manufactures pillows. The current year operating budget is based on ...

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Kelly's Pillow Company manufactures pillows. The current year operating budget is based on ...

Kelly's Pillow Company manufactures pillows. The current year 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 was 36,000 pillows using 19,000 machine-hours. Actual variable costs were $20 per machine-hour.

Required:
Calculate the variable overhead rate and efficiency variances.

Textbook

Cost Accounting: A Managerial Emphasis, Canadian Edition

Edition: 7^th

Authors: Horngren, Datar, Rajan, Beaubien

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