Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour-hours. Each unit requires two standard hours of labour 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 overhead rate was £3.00 per unit. The actual data pertaining to the manufacturing overhead for the year are presented below:$$\begin{array} { l l }
\text { Actual production } & 198,000 \text { units } \
\text { Actual direct labour-hours } & 440,000 \text { direct labour-hours } \
\text { Actual variable overhead } & £ 352,000 \
\text { Actual fixed overhead } & £ 575,000
\end{array}$$
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The standard hours allowed for actual production for the year total

A)247,500.
B)396,000.
C)400,000.
D)495,000.

Question

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labour-hours. Each unit requires two standard hours of labour 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 overhead rate was £3.00 per unit. The actual data pertaining to the manufacturing overhead for the year are presented below:$$\begin{array} { l l } 
\text { Actual production } & 198,000 \text { units } \
\text { Actual direct labour-hours } & 440,000 \text { direct labour-hours } \
\text { Actual variable overhead } & £ 352,000 \
\text { Actual fixed overhead } & £ 575,000
\end{array}$$
-
The standard hours allowed for actual production for the year total

A)247,500.
B)396,000.
C)400,000.
D)495,000.

Quizplus · Accepted Answer

The standard hours allowed for actual production are calculated based on the number of units produced and the standard hours required per unit. Given that each unit requires two standard hours of labour and the actual production was 198,000 units, the standard hours allowed would be 198,000 units * 2 hours/unit = 396,000 hours.

Franklin Glass Works Uses a Standard Cost System in Which