The Chuba Corporation Uses a Standard Cost System in Which

question 98

Multiple Choice

The Chuba Corporation uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours (DLHs) . During December, the company actually used 7,200 direct labor-hours and made 1,900 units of finished product. The standard cost card for one unit of product includes the following data concerning manufacturing overhead: Variable overhead: 4 DLHs @ $5.25 per DLH
Fixed overhead: 4 DLHs @ $2.00 per DLH
For December, the company incurred $16,550 in fixed manufacturing overhead costs and recorded an $800 unfavorable volume variance.
The budgeted fixed manufacturing overhead cost was:

• A) $15,200
• B) $16,000
• C) $16,550
• D) $13,700
• E) $14,400

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