Chapter 10:

Flandro Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company's budget for the current year: 16,000 Denominator activity (direct labor-hours) 46,400 Variable manufacturing overhead cost 161,600 Fixed manufacturing overhead cost The standard cost card for the company's only product is given below: Direct materials, 4 yards at $1.70 per yard 6.80 20.00 Direct labor, 2 hour at $10.00 per hour Manufacturing overhead, 130% of direct labor cost 26.00 Standard cost per unit 52.800 During the year, the company produced 8,320 units of product and incurred the following costs: 87,120 Materials purchased, 52,800 yards at $1.65 per yard Materials used in production (in yards) 34,350 132,600 Direct labor cost incurred, 17,000 hours at $7.80 per hour Variable manufacturing overhead cost incurred 46,450 $102,000 Fixed manufacturing overhead cost incurred