The Claus Corporation Makes and Sells a Single Product and Uses

question 92

Multiple Choice

The Claus Corporation makes and sells a single product and uses standard costing. During January, the company actually used 8,700 direct labor-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 manufacturing overhead costs and recorded a $875 favorable volume variance.
The denominator level of activity in direct labor-hours (DLHs) used by Claus in setting the predetermined overhead rate for January is:

• A)9,500 DLHs
• B)9,250 DLHs
• C)8,750 DLHs
• D)10,500 DLHs

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Definitions:

Empowering Culture

A workplace environment that gives employees autonomy, resources, and support to contribute, innovate, and make decisions.

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