Lane Company (Ch 10)

3.33 points Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours, Variable manufacturing overhead should be $2.60 per standard direct labor-hour and fixed manufacturing overhead should be $495,000 per year. The company's product requires 4 pounds of material that has a standard cost of $4.50 per pound and 1.5 hours of direct labor time that has a standard rate of $12.30 per hour. The company planned to operate at a denominator activity level of 75,000 direct and to produce 50,000 units of product during the most recent year. Actual activity and costs for the year were as follows: Number of units produced 60,000 Actual direct labor-hours worked 97,500 Actual variable manufacturing overhead cost incurred 165,750 Actual fixed manufacturing overhead cost incurred 536,250