Question

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at $900,000 for the year, and the fixed manufacturing overhead rate was $1.50 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below:Actual production: 198,000 unitsActudal direct labor hours 440,000 direct labor hoursActual variable manufacturing overhead $352,000Actual fixed manufacturing overhead $575,000The standard hours allowed for actual production for the year total:A. 247,500B. 396,000C. 400,000D. 495,000

Answer 1

Option B

396,000 labour hours

Step-by-step explanation:

Standard hours allowed for actual production = standard hours× actual production.

The standard hours per unit of the product is 2 hrs.

The actual production is 198,000 units

Standard hours allowed for actual production

=2 hrs × 198,000

= 396,000 labour hours