Franklin Glass Works Uses a Standard Cost System in Which

question 45

Multiple Choice

Franklin Glass Works uses a standard cost system in which manufacturing overhead is applied on the basis of standard direct labor-hours. Each unit requires two standard hours of direct labor for completion. The denominator activity for the year was based on budgeted production of 200,000 units. Total overhead was budgeted at $900,000 for the year, and the fixed manufacturing overhead rate was $1.50 per direct labor-hour. The actual data pertaining to the manufacturing overhead for the year are presented below:
-Franklin's fixed manufacturing overhead budget variance for the year is:

• A)$19,000 favorable
• B)$25,000 favorable
• C)$25,000 unfavorable
• D)$19,000 unfavorable

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