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Vitko Corporation makes automotive engines. For most current month, budgeted production was 6,000 engines. The standard power cost is $8.80 per machine hour. The company's standard indicates that each engine requires 6.1 machine-hours. Actual productions were 6,400 engines. Actual machine-hours were 38,730 machine-hours. Actual power cost totaled $350,628.
Determine the rate and efficiency variances for the variable overhead item power cost and point out whether those variances are unfavorable or favorable.
Find gain or loss will be reported on the income statement for the sale of the machine?
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