Zotta Enterprises uses standard costing and applies manufacturing overhead cost to products on the basis of standard direct labor-hours (DLHs). Budgeted and actual data relating to manufacturing overhead for last year appear below: The standard direct labor-hours allowed for the output was:
A) 14,167 DLHs
B) 19,600 DLHs
C) 20,000 DLHs
D) 20,400 DLHs

Question

Zotta Enterprises uses standard costing and applies manufacturing overhead cost to products on the basis of standard direct labor-hours (DLHs). Budgeted and actual data relating to manufacturing overhead for last year appear below:  The standard direct labor-hours allowed for the output was:
A) 14,167 DLHs 
B) 19,600 DLHs 
C) 20,000 DLHs 
D) 20,400 DLHs

Quizplus · Accepted Answer

Standard direct labor-hours allowed for the output = 1.2 DLHs per unit × 17,000 units = 20,400 DLHs

Zotta Enterprises Uses Standard Costing and Applies Manufacturing Overhead Cost