The Chilton Corporation specializes in manufacturing one type of desk lamp. Chilton allocates variable manufacturing overhead costs on the basis of machine hours. Chilton budgeted 0.4 machine hours per lamp and allocates variable overhead at a rate of $ 1.80 per machine hour. Last year Chilton manufactured 23 comma 000 lamps, used 161 comma 000 machine hours and incurred actual variable overhead costs of $ 257 comma 600. What was Chilton's variable manufacturing overhead rate variance last year?

$2.90

Explanation:

Budget:

No of machine hours = 23,000 lamps × 0.4 machine hours per lamp = 9,200 machine hours

Overhead cost of lamps produced = $1.80 × 23,000 lamps = $41,400

Therefore, budgeted rate = $41,400/9,200 = $4.50 per lamp

Actual:

Total no of machine hours used = 161,000 machine hours

Total cost of actual overhead incurred = $257,600

Therefore, actual overhead rate = $257,600/161,000 = $1.60

Variance:

Variable manufacturing overhead rate variance last year = $4.50 · $1.60 = $2.90

answer; the nav calculated at the market close at 4: 00 pm new york time;

hi there, i would say your answer is:

b. there is a fixed quantity of resources and technology available.

hope that : )