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The Claus Company Makes and Sells a Single Product and Uses

question 212

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The Claus Company makes and sells a single product and uses standard costing. During January, the company actually used 8,700 direct labour hours (DLHs) and produced 3,000 units of product. The standard cost card for one unit of product includes the following:

Variable Factory Overhead: 3.0 DLHs @ $4.00 per DLH.
Fixed Factory Overhead: 3.0 DLHs. @ $3.50 per DLH.

For January, the company incurred $22,000 of actual fixed overhead costs and recorded an $875 favourable volume variance.




-What was the denominator level of activity in direct labour hours (DLHs) used by Claus in setting the predetermined overhead rate for January?

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Definitions:

Dietician

A healthcare professional specializing in diet and nutrition, helping to promote healthy eating habits and manage dietary concerns.

Calcium

A chemical element with the symbol Ca, an essential nutrient for living organisms, particularly in bone formation.

Solution

The result of solving a problem or equation, often denoting a value or set of values that satisfy the given mathematical conditions.

Inequality

An algebraic relationship indicating that one quantity is larger or smaller than another.

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