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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
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: The standard hours allowed for actual production for the year total: 495,000 247,500 400,000 396,000 The fixed manufacturing overhead applied to Franklin's production for the year is: $594,000 $600,000 $575,000 $484,200 Franklin's fixed manufacturing overhead volume variance for the year is: $19,000 favorable $25,000 favorable $55,000 unfavorable $6,000 unfavorable
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