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Harris Company Uses a Standard Cost System in Which It

Question 27

Multiple Choice

Harris Company uses a standard cost system in which it applies manufacturing overhead to units of product on the basis of standard direct labor-hours (DLHs) .The company has provided the following data:  Denominator activity.....................................................Actual activity................................................................Standard hours allowed for the output............................Predetermined overhead rate $(2 variable +$3 fixed ) ...5,000 DLHs 5,600 DLHs 5,500 DLHs $5 per DLH \begin{array}{c}\begin{array}{lll}\text { Denominator activity.....................................................}\\\text {Actual activity................................................................}\\\text {Standard hours allowed for the output............................}\\\text {Predetermined overhead rate \( \$(2 \) variable \( +\$ 3 \) fixed \( ) \) ...}\end{array}\begin{array}{rr}5,000 & \text { DLHs } \\5,600 & \text { DLHs } \\5,500 & \text { DLHs } \\\$ 5 & \text { per DLH } \end{array}\end{array}
The volume variance would be:


A) $2,500 F
B) $1,800 F
C) $1,800 U
D) $1,500 F

Correct Answer:

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