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Megan, Incorporated uses the following standard costs per unit for one of its products: Direct labor (2.0 hours @ $5.00 per hour) = $10.00; overhead
Megan, Incorporated uses the following standard costs per unit for one of its products: Direct labor (2.0 hours @ $5.00 per hour) = $10.00; overhead (2.0 hours @ $2.50 per hour) = $5.00. The flexible budget for overhead is $120,000 plus $1.00 per direct labor hour (DLH). Actual data for the past month show total overhead costs of $225,000, total fixed overhead of $123,000, 85,000 hours worked, and 40,000 units produced. What is the budgeted denominator activity level for Megan, Incorporated, in direct labor hours (DLHs)?
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