Croissant Company's Standard Fixed Overhead Cost Is $6 Per Direct

question 36

Multiple Choice

Croissant Company's standard fixed overhead cost is $6 per direct labor hour based on budgeted fixed costs of $600,000. The standard allows 1 direct labor hour per unit. During the current year, Croissant produced 110,000 units of product, incurred $630,000 of fixed overhead costs, and recorded 212,000 actual hours of direct labor.
What is the standard activity level on which Croissant based its fixed overhead rate?

• A)100,000 direct labor hours
• B)105,000 direct labor hours
• C)110,000 direct labor hours
• D)50,000 direct labor hours

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